What is LTCG (Long Term Capital Gains)? — Meaning, Definition & Example
Definition
LTCG applies when you sell a capital asset after the minimum holding period — 12+ months for listed equity/equity MF, 24+ months for property, gold, and other assets. Equity LTCG above ₹1.25 lakh is taxed at 12.5%. Property/gold LTCG is taxed at 12.5% without indexation.
Selling equity MF held for 2 years with ₹3 lakh gain: ₹1.25L exempt + ₹1.75L taxed at 12.5% = ₹21,875 tax.
🇮🇳 LTCG (Long Term Capital Gains) in Hindi / हिंदी में
LTCG (लॉन्ग टर्म कैपिटल गेन्स) — LTCG तब लागू होता है जब आप न्यूनतम होल्डिंग अवधि के बाद पूंजीगत संपत्ति बेचते हैं। इक्विटी पर ₹1.25 लाख से ऊपर 12.5% कर है।
LTCG (Long Term Capital Gains) (Hinglish) — LTCG tab lagta hai jab minimum holding period ke baad asset bechte ho. Equity pe ₹1.25 lakh tak exempt, uske upar 12.5% tax. Property/gold pe bhi 12.5% hai.
When Does a Gain Become 'Long-Term'? (Asset-wise Clock)
| Asset | Long-Term After | LTCG Rate (current) |
|---|---|---|
| Listed stocks & equity mutual funds | 12 months | 12.5% on gains above ₹1.25L/year (Sec 112A) |
| Property (land/building) | 24 months | 12.5% no indexation* |
| Physical gold / jewellery | 24 months | 12.5% |
| Gold ETFs / listed gold funds | 12 months | 12.5% |
| Debt mutual funds (post-Apr-2023 buys) | Never qualifies | Always slab rate |
*Property bought before 23 July 2024: resident individuals may choose 20% WITH indexation if it computes lower — run both before selling.
The ₹1.25 Lakh Rule, Properly Understood
The exemption applies to equity LTCG only, is per financial year (not per fund or per sale), covers stocks + equity funds combined, and does not carry forward. March discipline: if your unrealised equity gains exceed ₹1.25L, harvesting up to the limit — sell, book, repurchase — resets your cost basis upward for free. A decade of ignoring this quietly donates ₹1.5L+ of tax.
Grandfathering — The Two Dates That Protect Old Gains
31 Jan 2018 (equity): for shares/funds bought before this date, cost = the HIGHER of actual cost or that day's price — gains before 2018 stay untaxed. Your broker's statement computes this automatically; don't overwrite it. 23 Jul 2024 (property): the indexation-choice date above. Both dates exist so old investors aren't taxed retroactively — but only if your ITR uses the right cost.
Losses: The Asymmetric Rules
Long-term capital LOSSES can offset only long-term gains (short-term losses offset both). Unused LTCL carries forward 8 years — but only if the ITR was filed by the due date. Also note: equity LTCL is real and usable since 2018 — old advice that 'equity losses don't count' died with the exemption era.
Where People Overpay
① Selling everything in one FY instead of splitting across two March-ends (two ₹1.25L exemptions). ② Forgetting the ₹1.25L applies AFTER grandfathered cost. ③ Paying LTCG on property without checking Sections 54/54F/54EC reinvestment routes (full breakdown in our capital-gains guide). ④ Redeeming SIPs and assuming everything is long-term — each installment has its own clock (FIFO). Compute any scenario in our capital-gains calculator.
Rules verified as of July 2026 (FY 2026-27 framework; Budget 2026 made no tax changes). Facts last checked: 14 July 2026 by Priyanka Dhawan.