capital gains tax calculator

Short term or long term: the split that decides everything

Capital gains are taxed differently depending on how long you held the asset, and the dividing line is not the same for every asset. Get the classification wrong and every number after it is wrong too.

• Listed shares and equity mutual funds — the line falls at twelve months.
• Property, land, gold and unlisted shares — twenty-four months.
• Debt mutual funds — units bought from April 2023 onward are treated the same way whatever the holding period, so the split does not help you.

The calculator applies the right threshold once you pick the asset, and shows the holding period in months so you can see which side of the line you fell on. A sale a few weeks earlier than planned can move an asset from long term to short term, and that single fact usually matters more than any other input on this page.

How to use the calculator

1. Pick what you sold. The rules differ enough by asset that this changes the whole calculation, not just the rate.
2. Enter both dates. Purchase and sale, not the financial years — the holding period is counted in months.
3. Enter both prices. What you paid and what you received.
4. Add your costs. Brokerage, stamp duty, registration, legal fees, and money spent improving the asset. These reduce the gain and people routinely forget them.

One input deserves care. If you bought the same share or fund in several tranches at different prices, the purchase price to enter is your average cost, not what you paid the first time. Our stock average calculator blends multiple buys into a single figure — using the first purchase price instead always overstates the gain, and therefore the tax.

Where the asset is taxed at your slab rate, a slab selector appears — the result then depends on your other income, which the calculator cannot know. For property, a field for the 2001 value appears, explained below.

What indexation does, and when you still get it

Indexation adjusts what you paid for inflation before the gain is worked out. Buy something for ₹40 lakh in 2015 and sell for ₹95 lakh in 2025 and the raw gain is ₹55 lakh — but a large part of that is simply the rupee being worth less. Indexation restates the original cost in today’s money using the Cost Inflation Index published each year by the CBDT.

The formula is straightforward:

Indexed cost = Original cost × (CII of the year you sold ÷ CII of the year you bought)

The index is set to 100 for 2001-02 and rises each year. The calculator shows both index values it used, so you can check the arithmetic against the CBDT table yourself.

Indexation was withdrawn for most assets in July 2024, but property acquired before that change may still elect it — and you may choose whichever of the two bases produces the lower tax. The calculator computes both and applies the better one, showing you the figure it did not use so the choice is visible rather than hidden.

Indexation does not always win. Where an asset has risen sharply, the flat rate on the raw gain can be lower than a higher rate on the indexed gain. That is why the comparison is worth seeing rather than assuming.

Property bought before 2001

The Cost Inflation Index only goes back to 2001-02, so an asset bought in 1985 cannot be indexed from its purchase year. The law allows a substitution instead: you may treat the property’s fair market value as on 1 April 2001 as its cost, and index from there.

For most older property this produces a much higher cost base and a much smaller taxable gain, because values rose substantially between the purchase and 2001. The figure has to be supportable — a registered valuer’s report for that date is the usual evidence, and circle rates from the period are sometimes accepted.

Enter it in the 2001 value field and the calculator uses it in place of the purchase price. Leave it blank and the actual cost is used.

Reinvestment can remove the tax entirely

Capital gains tax on property is not unavoidable. Several sections of the Income Tax Act allow the gain to be exempted if it is reinvested, and they are the single biggest reason a large computed figure may not be what you actually pay.

• Section 54 — gain on a residential house, reinvested in another residential house within the prescribed window.
• Section 54F — gain on any long-term asset other than a house, reinvested in a residential house. Conditions attach to how many other houses you own.
• Section 54EC — gain reinvested in specified capital gains bonds within six months, subject to a cap and a lock-in.

If you have not reinvested by the time your return is due, the Capital Gains Account Scheme lets you park the money with a bank and retain the exemption while you complete the purchase.

None of this is modelled by the calculator. It computes the tax on the gain as though no exemption is claimed. Each of these sections carries conditions, time limits and caps that depend on your circumstances, and getting them wrong is expensive. Treat the figure above as the position before reinvestment, and speak to a chartered accountant about which route applies to you.

Mutual funds: equity and debt are not the same

The label on the fund matters less than what it holds. A fund is treated as equity-oriented when it keeps a specified proportion in Indian equities; everything else is taxed under the debt rules.

Hybrid and balanced funds are where people get caught. Two funds with similar names can sit on opposite sides of that line, and the tax treatment changes completely. The scheme document states which category a fund falls in — check it rather than assuming from the name. Our mutual fund screener shows the SEBI category for every scheme, which is the quickest way to confirm which set of rules applies to yours.

For debt funds, units bought from April 2023 onward are taxed the same way regardless of how long you hold them. Holding for longer does not change the treatment, which reverses the intuition most investors carry over from equity.

Why a SIP is many purchases, not one

A systematic investment plan buys units every month, and each instalment has its own purchase date and its own cost. When you redeem, units are taken on a first-in-first-out basis: the oldest go first.

So a single redemption from a three-year SIP can produce long-term gains on the early instalments and short-term gains on the recent ones, in the same transaction. There is no single holding period for the investment as a whole.

The calculator handles one purchase against one sale. For a SIP, work out each instalment separately using its own purchase date, or take the capital gains statement your fund house or RTA provides — it does the FIFO allocation for you and is what you should be filing from anyway.

Losses are worth recording

A capital loss is not simply a bad outcome to forget about. The rules allow losses to be set against gains, which can reduce or remove a tax bill in the same year or a later one.

• A short-term capital loss may be set against both short-term and long-term gains.
• A long-term capital loss may only be set against long-term gains.
• Unused losses may be carried forward for several years — but only if you file your return by the due date. Miss the deadline and the carry-forward is lost.

That last point costs people real money every year. If you have made a loss, file on time even when no tax is due.

Tax is the last step, not the first

The tax on a gain is worth knowing, but it is calculated after the fact. The figures that decide whether an investment was worth holding are the return itself and what it cost you to hold it.

Our holding period return calculator gives the total return on a position including any income it paid, which is the pre-tax number this page then taxes. For funds, the screener shows expense ratios — a percentage charged every year, which over a long holding period usually costs more than the tax does on the way out.

One asset class sits outside all of this. Crypto and other virtual digital assets are not taxed as capital gains at all — they fall under a separate regime with a flat rate regardless of holding period, no loss set-off, and tax deducted at source on transfers. Do not use this calculator for them; see our crypto profit calculator instead.

What this calculator does not do

It computes tax on a single transaction under the rules for the selected asset. It does not account for:

• Exemptions under sections 54, 54F, 54EC or the Capital Gains Account Scheme
• Set-off of losses from other transactions, or losses carried forward
• Surcharge, which applies at higher income levels
• Your total income, other than the slab you select where one is needed
• Residency status — different rules and withholding apply to non-residents
• Bonus and rights issues, splits, mergers, or ESOPs, where the cost base is determined by specific rules

Use it to understand the shape of the liability and the effect of holding period and indexation. Use a chartered accountant to file.

For the calculations that come before the tax, see all our finance calculators.