Capital Gains Calculator
Estimate tax on equity and mutual fund gains for short-term and long-term holding periods.
India-specific calculator. It uses Indian rules, rates and rupee amounts, and the currency selector is switched off on this page.
The capital gains calculator estimates the tax you may owe on gains from shares and equity mutual funds. For listed equity, a holding period of more than 12 months makes the gain long-term, taxed at a lower rate after an annual exemption; shorter holdings are short-term and taxed higher.
How to use the calculator
- Enter the purchase value of the investment.
- Enter the sale value.
- Add the holding period in months.
- The calculator classifies the gain as short or long term and applies the rate.
How it is calculated
Long term (over 12 months): 12.5% on gains above ₹1,25,000
Short term: 20% of the gain
Worked example
₹5,00,000 invested, sold at ₹7,50,000 after 24 months
Gain = ₹2,50,000, which is long term
Taxable gain = 2,50,000 − 1,25,000 = ₹1,25,000, so tax = 12.5% = ₹15,625.
Who should use this calculator
- Investors selling shares or equity mutual funds who want to know the tax before they redeem.
- Anyone planning year-end sales and wondering how much they can book within the annual exemption.
- People switching from one fund to another, which counts as a sale and triggers capital gains.
- Investors comparing the tax cost of holding a little longer to move from short-term to long-term rates.
Common mistakes to avoid
- Applying one rate to all gains. For listed equity the holding period decides everything: more than twelve months attracts the long-term rate, twelve months or less the higher short-term rate.
- Forgetting the annual exemption. Long-term equity gains up to ₹1,25,000 a year are exempt. Gains below that limit are not taxed at all.
- Ignoring cess and surcharge. The calculator shows the base tax. Cess applies on top, and a surcharge applies at higher income levels.
- Assuming that switching funds is not a sale. Redeeming one fund to buy another realises the gain and starts a fresh holding period.
- Never using the exemption. Investors who sell a little each year can use the annual exemption repeatedly, whereas one large redemption uses it only once.
The twelve-month line and what it costs
Holding equity for more than twelve months changes the tax treatment entirely. ₹5,00,000 invested and sold at ₹7,50,000 after twenty-four months produces a long-term gain of ₹2,50,000. After the ₹1,25,000 exemption, ₹1,25,000 is taxed at 12.5%, giving ₹15,625. The same gain realised after six months would be a short-term gain taxed at 20%, or ₹50,000.
That difference explains why so much retail selling happens just after the one-year mark. If you are close to the line and do not urgently need the money, waiting a few weeks can reduce the tax significantly. There is also a useful discipline in reviewing holdings each year to use the exemption deliberately rather than saving every gain for one large redemption.
Capital gains terms explained
- Capital gain
- The profit on selling an investment — sale value minus purchase value.
- LTCG
- Long-term capital gain, for listed equity held more than twelve months.
- STCG
- Short-term capital gain, for listed equity held twelve months or less.
- Holding period
- How long the investment was owned. It determines which rate applies.
- Cess
- A 4% charge on the tax, added on top of the base capital gains tax.
Harvesting gains and setting off losses
Two simple techniques reduce the tax bill legally. The first is using the annual exemption deliberately: selling holdings with about ₹1,25,000 of long-term gain each year uses the exemption repeatedly, and you can buy the same holding back afterwards because there is no wash-sale rule for this in India. The second is setting losses against gains — a loss on one equity holding can offset a gain on another in the same category, and unused losses can be carried forward for several years.
Both depend on keeping good records. Note the purchase date, the sale date and the value for each transaction, because the holding period decides the rate and the exemption is applied per financial year.
Frequently asked questions
When does a gain become long term?
For listed shares and equity mutual funds, a holding period of more than 12 months makes the gain long term. For debt funds and unlisted shares the threshold is different, and the rates vary.
Was the exemption changed?
Yes. From July 2024 the equity long-term exemption is ₹1.25 lakh per year (it was ₹1 lakh earlier), the LTCG rate is 12.5% and the STCG rate is 20% for listed equity.
Do I need to pay tax if I reinvest the gain?
Yes. For listed equity there is no exemption for reinvestment. Capital gains tax applies when you sell, regardless of what you do with the money afterwards.