Question 1

What is the LTCG tax rate on equity mutual funds?

Accepted Answer

12.5% on gains above ₹1,25,000 per year (Section 112A) for transfers on or after 23 July 2024. The ₹1.25L exemption is a single annual limit across all your Section 112A gains — listed shares, equity funds and business trust units combined — not one limit per holding.

Question 2

What is the STCG tax rate on stocks?

Accepted Answer

20% under Section 111A for listed equity shares and equity-oriented mutual funds held 12 months or less, where the transfer takes place on or after 23 July 2024. Transfers before that date were charged at 15%. The rate is the same under both the old and new regimes.

Question 3

Does Section 87A rebate apply to capital gains?

Accepted Answer

Not to Section 111A short-term or Section 112A long-term tax — those are charged at special rates and the rebate cannot reduce them, even if your total income is below ₹12L. It is different for gains taxed at slab rates, such as a gold ETF sold within 12 months or a specified mutual fund: those form part of your total income, so the rebate can apply to them in the normal way.

Question 4

Do I need to file ITR-2 for capital gains?

Accepted Answer

Not always. From AY 2026-27 you can report an aggregate Section 112A long-term gain of up to ₹1,25,000 in ITR-1 and stay on that form. You do need ITR-2 (or ITR-3) once you have any short-term equity gain, any gain taxed at slab rates, any Section 112 gain such as property or gold, or Section 112A gains above the exemption — because Schedule CG only exists in ITR-2 and ITR-3. Either way the gain must be reported: exempt is not the same as undisclosed.

Question 5

How is debt mutual fund gain taxed?

Accepted Answer

A debt fund bought on or after 1 April 2023 is a specified mutual fund under Section 50AA — the gain is treated as short-term and taxed at your slab rate however long you held it. Units bought before April 2023 and held more than 24 months are long-term at 12.5% without indexation.

Question 6

Are arbitrage funds taxed like equity or like debt?

Accepted Answer

Like equity. SEBI requires an arbitrage fund to hold at least 65% in equity and equity-related securities, which makes it an equity-oriented fund for tax purposes. So Section 111A applies to short-term gains and Section 112A — including the ₹1.25L exemption — to long-term gains, even though the fund behaves like a debt product.

Question 7

How is a gold or silver ETF taxed?

Accepted Answer

A gold or silver ETF becomes long-term after 12 months, like a listed share, and long-term gains are 12.5% without indexation. But it is not an equity-oriented fund, because it holds bullion rather than equity, so Section 111A cannot apply to it. Sell within 12 months and the gain is taxed at your slab rate, not 20%. Physical gold and gold funds use the longer 24-month test.

Question 8

Which expenses can I deduct from a capital gain?

Accepted Answer

Section 48 allows expenditure incurred wholly and exclusively in connection with the transfer — brokerage, exchange and clearing charges, SEBI turnover fees, stamp duty and GST on brokerage. Securities transaction tax is specifically not deductible, so leave STT out of your cost and expense figures.

Capital Gains Tax Calculator — Stocks, MF, Property

Frequently Asked Questions

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Capital Gains Tax Calculator — Stocks, MF, Property

Frequently Asked Questions

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