How do the new capital gains tax rules for FY 2024-25 affect long-term investors in equity mutual funds?

The new capital gains tax rules increase the LTCG rate for equity mutual funds to 12.5%, prompting long-term investors to reassess their investment strategies to optimize tax efficiency.

How do the new capital gains tax rules for FY 2024-25 affect long-term investors in equity mutual funds?

The new capital gains tax rules increase the LTCG rate for equity mutual funds to 12.5%, prompting long-term investors to reassess their investment strategies to optimize tax efficiency.

How much capital gain is tax free?

As per Section 54 to 54GB exemptions, capital gains can be tax-free if reinvested in specified assets like a new residential property or certain bonds, or if the gain amount falls within the basic exemption limit after considering total income.

How to avoid capital gains tax on sale of property?

You can avoid capital gains tax on the sale of property by reinvesting the gains in another residential property under Section 54, investing in specified bonds under Section 54EC within six months, or depositing the amount in a Capital Gains Account Scheme before filing your ITR.

How much capital gain is tax free?

As per Section 54 to 54GB exemptions, capital gains can be tax-free if reinvested in specified assets like a new residential property or certain bonds, or if the gain amount falls within the basic exemption limit after considering total income.

How to avoid capital gains tax on sale of property?

You can avoid capital gains tax on the sale of property by reinvesting the gains in another residential property under Section 54, investing in specified bonds under Section 54EC within six months, or depositing the amount in a Capital Gains Account Scheme before filing your ITR.

How much capital gains can you get tax free?

Capital gains can be entirely tax-free if your total taxable income, including gains, does not exceed the basic exemption limit (₹2.5 lakh for individuals below 60, ₹3 lakh for senior citizens, and ₹5 lakh for super senior citizens), or if exemptions under Sections 54–54GB are fully utilised.

What is the time limit to avoid capital gains tax?

To claim exemption, you must reinvest the capital gains within two years (for purchase) or three years (for construction) in a new residential property, or invest in eligible bonds within six months from the date of transfer.

What is the minimum amount for capital gains tax?

There is no fixed “minimum amount” for capital gains tax; it applies if you have any taxable capital gain. However, gains falling within the basic exemption limit may not attract tax.

How to calculate capital gain tax on sale of property?

To calculate capital gains tax on property, subtract the indexed cost of acquisition and improvement, plus transfer expenses, from the sale price. Apply the applicable tax rate (12.5% for LTCG from FY 2024–25 or slab rate for STCG).

Do I have to pay capital gains tax if my total income is less than 5 lakh?

If your total income, including capital gains, is less than ₹5 lakh, you may not have to pay tax due to the rebate under Section 87A, but you must still report the gains in your income tax return.

How much capital gains can you get tax free?

Capital gains can be entirely tax-free if your total taxable income, including gains, does not exceed the basic exemption limit (₹2.5 lakh for individuals below 60, ₹3 lakh for senior citizens, and ₹5 lakh for super senior citizens), or if exemptions under Sections 54–54GB are fully utilised.

What is the time limit to avoid capital gains tax?

To claim exemption, you must reinvest the capital gains within two years (for purchase) or three years (for construction) in a new residential property, or invest in eligible bonds within six months from the date of transfer.

What is the minimum amount for capital gains tax?

There is no fixed “minimum amount” for capital gains tax; it applies if you have any taxable capital gain. However, gains falling within the basic exemption limit may not attract tax.

Do I have to pay capital gains tax if my total income is less than 5 lakh?

If your total income, including capital gains, is less than ₹5 lakh, you may not have to pay tax due to the rebate under Section 87A, but you must still report the gains in your income tax return.

How to calculate capital gain tax on sale of property?

To calculate capital gains tax on property, subtract the indexed cost of acquisition and improvement, plus transfer expenses, from the sale price. Apply the applicable tax rate (12.5% for LTCG from FY 2024–25 or slab rate for STCG).

Home

Community

About Us

Schemes

Services

Updated Capital Gains Taxation Rules In India (FY 2024-25): Complete Guide For Investors About LTCG & STCG

Komal Bajpai

Author

Updated: 11-08-2025 at 3:30 PM

🚀

10M+

Reach – Join the

Movement!

❓

50K+

Queries Answered

- Ask Yours Today!

🔥

1.5L+

Users Benefiting

- Why Not You?

🚀

10M+

Reach – Join the

Movement!

❓

50K+

Queries Answered

- Ask Yours Today!

🔥

1.5L+

Users Benefiting

- Why Not You?

To make taxation easier and to encourage investments over the long term, the Indian government announced new capital gains tax rules that will begin on July 23, 2024. These changes for different asset classes will have an impact on Long-term capital gain tax on shares as well as Short-term capital gain tax. Investors need to learn about these changes so they can make better decisions about their investments and taxes.

Summary Of Modified Rates Of Capital Gains Tax

The table below is a summary of the new rates of Long-term capital gain tax on shares and Short-term capital gain tax applicable in different asset classes. Read the table below in detail to know the Capital Gains Tax New Rules

Asset Class	Holding Period for LTCG	LTCG Tax Rate	STCG Tax Rate	Notes
Listed Equity Shares & Equity Mutual Funds	12 months	12.5%	20%	STT applicable; LTCG exemption up to ₹1.25 lakh per annum
Unlisted Shares	24 months	12.5%	As per the slab	No indexation benefit
Debt Mutual Funds	36 months	12.5%	As per the slab	Indexation benefit removed
Foreign Equity Shares	24 months	12.5%	As per the slab	Gains are taxed at applicable rates
Foreign Currency Convertible Bonds (FCCBs)	36 months	12.5%	As per the slab	Specific provisions under Section 115AC
Global Depository Receipts (GDRs)	36 months	12.5%	As per the slab	Taxed under Section 115AC
Real Estate Properties	24 months	12.5%	As per the slab	Indexation benefit removed
Gold and Other Physical Assets	36 months	12.5%	As per the slab	Indexation benefit removed

Also Read: Budget 2025: Latest Tax Rates And Holding Periods For All Assets

Key Changes To Capital Gains Taxation

New capital gain tax rules in India have been announced by the government, and the government has also clarified certain items and given a boost to long-term capital gains tax on shares, which includes temporary inflation, so these changes have also substantially flipped the amounts of taxes and benefits applicable to various forms of goods. Good work has been put done:)

1. Rates increased.

For most asset classes, the LTCG rates have been increased from 10% to 12.5%.
We now pay the capital gains taxes on short-term capital gains from listed equity shares and equity mutual funds at 20% as opposed to 15%.

2. Indexation benefit taken away.

Indexation benefit is the benefit that allows a purchaser to apply inflation to the cost of purchase, and for most asset classes, including debt mutual funds and real property, is taken away.

3. New exemption limit.

The exemption is for LTCG made from listed equity shares and equity mutual funds, and the exempt limit has risen to ₹1.25 lakhs a year.

4. Change for Foreign Investors.

The new rates will also apply to FPIs and NRIs, so their investment returns are also likely to change.

Considerations For Investors

The revised new capital gain tax rules come with significant ramifications for investors in all assets. Knowledge of such changes is important for making financial and tax planning decisions.

Equity Investors: The new Short-term capital gain tax rate is likely to lower the levels of short-term trading, thus forcing the investor to venture into equities and hold them for longer periods to enjoy the lower LTCG rates.
Debt Mutual Fund Investors: Debt mutual funds are now less tax-responsive since we have lost indexing benefits, and thus may result in investors searching for new fixed-income options.
Real Estate Investors: The loss of indexation benefits ultimately increases the tax burden accrued from real estate sales and effectively decreases their returns.
Foreign Investors: The new tax rate changes may lead FPIs and NRIs to reconsider how tax rates affect their investment decisions and portfolio allocations.

Also Read: 6 Ways In Which Senior Citizens Can Reduce Their Capital Gains During ITR Filing

Tax Planning Suggestions

Effective tax planning helps investors minimise liabilities and maximise post-tax returns. The following strategies can guide individuals in aligning their investments with the updated capital gains tax structure.

Longer Time Influences: Investors should rethink how long they invest in their assets, and consider a longer time horizon, as it is a tax-effective preference to use the lower LTCG tax rate.
Diversification: Investments in multiple asset types can offer portfolio diversification while also providing tax benefit options.
Professional Advice: Speak with a tax professional, as they may have a variety of tailored plans or strategies to use that may help your specific tax situation, i.e., the new capital gains regime.

Conclusion

Overall, the new capital gains tax rules in India look to prompt long-term investments and fulfil global standards of taxation regimes. Investors must remain astute to these changes and monitor how these tax changes impact their investment processes.

Get the latest updates on government schemes and policies with Jaagruk Bharat. Join India's biggest Jaagruk Bharat community. Share your thoughts, questions, and favourite topics with us.

Frequently Asked Questions