BooksIQLong-term capital gains on listed equity shares and equity-oriented mutual funds (STT paid) are taxed at 12.5% beyond ₹1.25 lakh per year — raised from 10% / ₹1 lakh by Finance Act 2024 with effect from 23 July 2024. No indexation.
Key points
- Applies when (a) equity shares are sold on a recognised stock exchange after holding > 12 months AND (b) STT was paid on both acquisition and sale (with limited exceptions for IPO / FPO / off-market acquisitions).
- Same treatment for units of equity-oriented mutual funds and equity-oriented business trusts (REIT/InvIT) held > 12 months.
- The first ₹1,25,000 of aggregate LTCG in the FY is EXEMPT (raised from ₹1,00,000 by FA 2024 effective 23-Jul-2024).
- Excess taxed at 12.5% flat (raised from 10% by same amendment) — without indexation.
- NIL § 87A rebate available on §112A income.
- Pre-23-Jul-2024 transfers continue at 10% on excess over ₹1 lakh — apportionment required for FY 24-25.
Reference: §112A, ITA 1961 — under ITA 2025 (FY 26-27 onwards), this is §198
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