LTCG Tax India 2026: Equity, Property, Gold, Crypto Compared (Budget 2025 Updated)

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Budget 2025 restored partial indexation benefit on real estate (with the option to choose between 12.5% without indexation or 20% with indexation for properties bought before 23 July 2024). Equity LTCG stays at 12.5% above Rs 1.25 lakh per year. Gold LTCG at 12.5% without indexation. Crypto remains at flat 30%. The rules vary substantially by asset class — this is the consolidated FY 2025-26 guide with worked examples for each asset, including the Budget 2025 grandfathering provisions for property sales and the LTCG carry-forward rules nobody talks about.

Why long-term capital gains rules changed twice in 18 months

Budget 2024 (July 2024) overhauled the entire capital gains framework — equity LTCG raised from 10% to 12.5%, LTCG exemption limit increased from Rs 1L to Rs 1.25L per year, property indexation removed, gold LTCG simplified. This caused public outcry from property owners, prompting Budget 2025 to restore optional indexation for properties bought before 23 July 2024.

The current framework for FY 2025-26:

1. Equity LTCG — 12.5% above Rs 1.25 lakh per year

Applies to:

• Listed equity shares (BSE / NSE)
• Equity mutual funds (defined as funds with 65%+ equity allocation)
• ETFs investing primarily in equity

Conditions:

• Held for more than 12 months from purchase date
• STT (Securities Transaction Tax) paid on both purchase and sale
• First Rs 1.25 lakh of equity LTCG per year is exempt; above that, 12.5% tax (plus surcharge and cess)

Example: sell Rs 5 lakh equity shares held for 2 years. Cost: Rs 3 lakh. LTCG: Rs 2 lakh.

• Exemption: first Rs 1,25,000 free
• Taxable LTCG: Rs 75,000
• Tax at 12.5%: Rs 9,375
• Cess at 4%: Rs 375
• Total tax: Rs 9,750

Indexation is NOT allowed on equity LTCG. The Budget 2024 grandfathering provision still applies: gains accrued on equity shares before 31 January 2018 are exempt; cost basis for those is the higher of actual cost or FMV on 31 Jan 2018.

2. Real Estate LTCG — Budget 2025 dual-option

For property held more than 24 months, two scenarios:

Property purchased BEFORE 23 July 2024

You have the choice between two computation methods:

• Method A: 20% LTCG tax with indexation benefit (using Cost Inflation Index to inflate purchase price)
• Method B: 12.5% LTCG tax without indexation (Budget 2024 default)

Taxpayer chooses whichever results in lower tax. This is the grandfathering provision restored by Budget 2025.

Worked example: bought flat in 2014 for Rs 50 lakh. Sold in FY 2025-26 for Rs 1.2 crore. CII for 2014: 240; for 2025-26: 363.

• Method A (with indexation): Indexed cost = Rs 50L × 363/240 = Rs 75.6L. LTCG = Rs 1.2Cr – Rs 75.6L = Rs 44.4L. Tax at 20% = Rs 8.88L.
• Method B (without indexation): LTCG = Rs 1.2Cr – Rs 50L = Rs 70L. Tax at 12.5% = Rs 8.75L.

In this case, Method B saves Rs 13,000. For older properties (10+ years), Method A typically wins due to higher CII multiplier.

Property purchased ON OR AFTER 23 July 2024

Only Method B applies: 12.5% LTCG without indexation. No choice. CII is irrelevant for these properties.

Section 54 / 54F exemptions still apply

Property LTCG can still be exempted by reinvesting in residential property:

• Section 54: sell residential property, buy/construct another residential property within 1-2 years (purchase) or 3 years (construction). LTCG exempt to the extent reinvested.
• Section 54F: sell any non-residential capital asset and buy residential property. Conditions same as 54 with additional rules around existing property ownership.
• Section 54EC: park up to Rs 50 lakh of LTCG in NHAI or REC bonds for 5 years to exempt the gain.

These exemptions still apply after Budget 2024 and Budget 2025 — only the tax rate computation changed.

3. Gold LTCG — 12.5% without indexation

For physical gold, gold ETFs, gold mutual funds, sovereign gold bonds (SGB):

• Physical gold and gold ETFs: held more than 24 months. LTCG at 12.5% without indexation. No exemption limit.
• Sovereign Gold Bonds (SGBs): held to maturity (8 years), LTCG is fully tax-free. If sold before maturity in secondary market, LTCG at 12.5%.
• Gold mutual funds: Budget 2024 brought these in line with debt funds — gains are slab-rate taxable regardless of holding period (no LTCG benefit at all).

Example: bought 100g gold in 2018 for Rs 3 lakh. Sold in 2025 for Rs 7.5 lakh. LTCG = Rs 4.5 lakh. Tax at 12.5% = Rs 56,250 + cess. No indexation. No exemption.

4. Debt Mutual Funds — slab rates only

Budget 2023 onwards (effective April 2023), debt mutual funds (with less than 35% equity allocation) lost LTCG benefit entirely. All gains, regardless of holding period, are taxed at your slab rate as “income from other sources”.

So for a 30% bracket taxpayer, Rs 5L gain on a debt fund held 5 years = Rs 1.5L tax (vs Rs 60K under the old LTCG regime). This effectively killed long-term debt mutual fund investing for high-income individuals — many shifted to equity-oriented hybrid funds or arbitrage funds (which retain equity LTCG treatment).

5. Unlisted Shares / Pre-IPO — 12.5% without indexation

For shares of unlisted companies, employee stock options (ESOPs) of unlisted firms, pre-IPO holdings:

• Holding period for LTCG: more than 24 months
• Rate: 12.5% without indexation
• No Rs 1.25L exemption (that’s only for listed equity)

Example: bought unlisted shares for Rs 1L in 2019. Company IPO’d in 2025 at Rs 8L valuation. If you sold immediately post-IPO (now listed equity, held since IPO date which is less than 12 months): STCG at slab rate. If you held 12+ months post-listing: LTCG at 12.5% with Rs 1.25L exemption.

For ESOPs: vesting and exercise are separately taxed events. Full ESOP/RSU tax guide.

6. Crypto / VDA — flat 30%, no LTCG concept

Virtual Digital Assets (including all cryptocurrencies and NFTs) don’t have an LTCG/STCG distinction. All gains are taxed at flat 30% regardless of holding period. Losses cannot be set off or carried forward. Full crypto tax guide.

The LTCG carry-forward rule

If you have LTCG losses (negative LTCG on equity, gold, property), they can be:

• Set off against other LTCG within the same year
• If unutilised, carried forward for 8 assessment years
• In future years, set off only against LTCG (cannot be netted against salary, business income, or interest)

Important: STCG losses can be set off against both LTCG and STCG. LTCG losses can be set off only against LTCG. Always check the loss-character before claiming setoffs.

Surcharge for high-income LTCG

For taxpayers with total income above Rs 50 lakh, surcharge applies on top of the LTCG tax:

• Rs 50L – Rs 1 Cr: 10% surcharge
• Rs 1 Cr – Rs 2 Cr: 15% surcharge
• Rs 2 Cr – Rs 5 Cr: 25% surcharge
• Above Rs 5 Cr: 37% surcharge (capped at 15% for LTCG only, since Budget 2022)

So an ultra-HNI selling property has effective tax of 12.5% + 15% surcharge + 4% cess = approximately 14.95% on the LTCG.

Reporting LTCG in ITR

• Equity LTCG: Schedule CG in ITR-2 / ITR-3. Auto-populated from broker statements via AIS in most cases.
• Property LTCG: Schedule CG with cost basis, indexation calculation (if applicable), sale value
• Gold/other: Schedule CG with similar disclosure
• Crypto: Schedule VDA (separate from CG)

Equity transactions in your demat account are now reported to AIS by NSE and BSE. Mismatch with your ITR triggers a Section 143(1) intimation.

Common LTCG planning strategies

Strategy 1: Harvest the Rs 1.25L equity LTCG exemption every year. Sell and re-buy equity to lock in cost basis at current value. Tax-free up to Rs 1.25L of gains annually. Even at 10% portfolio growth, this works for portfolios up to Rs 12.5L.

Strategy 2: Section 54EC bonds for property gains. Park up to Rs 50L of LTCG in NHAI/REC bonds. 5-year lock-in, ~5% interest, gain becomes tax-free.

Strategy 3: Section 54 reinvestment. If selling residential property and buying another, plan the timing so both transactions are within the 1-2-3 year windows.

Strategy 4: Spread gains across financial years. If selling shares with Rs 5L LTCG, sell Rs 2.5L in March and Rs 2.5L in April. Each year gets the Rs 1.25L exemption — effective taxable LTCG drops from Rs 3.75L to Rs 2.5L.

Verdict

Capital gains taxation in India in 2026 is genuinely complex, with rules varying by asset class, holding period, and purchase date. The Budget 2024 simplification was partially walked back by Budget 2025 for property — creating the dual-option grandfathering that benefits older property owners. For active investors, the Rs 1.25L annual equity exemption is the easiest win — harvest it every year. For property sellers, run BOTH methods (with and without indexation) and pick the lower tax. For debt funds, accept that the LTCG era is over and adjust your asset allocation accordingly. Run all transactions through your ITR Schedule CG accurately — broker AIS data is now thorough enough that mismatches trigger automated notices within months.