# LTCG on Stocks / MF Calculator

> Gains on listed shares and equity mutual funds held for more than 12 months are long-term capital gains under Section 112A. Since 23 July 2024, they are taxed at 12.5% on the amount above ₹1.25 lakh a year (earlier 10% above ₹1 lakh). STT must have been paid, and shares bought before 1 February 2018 use the 31 January 2018 price as cost if higher.

Interactive calculator: https://www.industax.com/calculators/ltcg-stocks

- **LTCG rate:** 12.5%
- **Yearly exemption:** ₹1.25 lakh
- **Long-term after:** 12 months

## Key rules

| Rule | Detail |
| --- | --- |
| Holding period | More than 12 months |
| Rate | 12.5% (plus surcharge capped at 15%, and 4% cess) |
| Exemption | First ₹1.25 lakh of LTCG in the year |
| Grandfathering | Cost = higher of actual cost and 31 Jan 2018 price (capped at sale value) |
| Rebate | Section 87A rebate doesn't reduce this tax |
| Losses | LTCL can be set off only against LTCG; carry forward 8 years |

## Tax harvesting

Booking up to ₹1.25 lakh of long-term gains every year and reinvesting resets your cost higher, so the exemption isn't wasted. Since there is no wash-sale rule in India, this is legitimate, but transaction costs and exit loads should be counted.

## Worked example: selling shares held for 2 years

1. Long-term gains in the year: ₹3,00,000.
2. Less exemption ₹1,25,000 → taxable LTCG ₹1,75,000.
3. Tax at 12.5% = ₹21,875, plus 4% cess = ₹875.

**Result:** Tax ≈ ₹22,750.

## FAQs

### Is the ₹1.25 lakh exemption per stock or per year?

Per year, across all listed shares, equity mutual funds and business trust units together.

### Do NRIs get the ₹1.25 lakh exemption?

Yes, the exemption under Section 112A is available to NRIs too, though TDS is deducted on their gains by the broker or fund.

### Are bonus shares and splits taxed differently?

Bonus shares have a cost of nil (or the 31 January 2018 price if grandfathered), and the holding period starts from allotment. Split shares carry the original cost and date.

## Official sources

- incometaxindia.gov.in: https://www.incometaxindia.gov.in/

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Canonical page: https://www.industax.com/calculators/ltcg-stocks
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.