Tax & Regulation
What is LTCG Tax (Long-Term Capital Gains Tax) - India?
In India, LTCG tax applies to profits from selling equity held for more than 12 months. Gains above ₹1.25 lakh per year are taxed at 12.5% (post Budget 2024).
Formula
LTCG Tax = (Selling Price - Purchase Price - ₹1.25L exemption) × 12.5%
How to Interpret
Holding stocks for at least 1 year reduces your tax rate from 20% (STCG) to 12.5% (LTCG). This tax advantage favors long-term investing.
Typical Ranges
Effective rate is 12.5% above ₹1.25L exemption. Plan exits around 1-year holding periods.