Formula used
Taxable LTCG = max(LTCG - 1,25,000, 0), taxed at 12.5%. STCG on specified equity is taxed at 20%. Health and education cess of 4% applies on the tax amount. Rates follow the post-23 July 2024 rules for STT-paid listed equity and equity mutual funds.
Example calculation
With Rs 1,00,000 STCG and Rs 3,00,000 LTCG: taxable LTCG is Rs 1,75,000, LTCG tax is Rs 21,875, STCG tax is Rs 20,000, total Rs 41,875 plus Rs 1,675 cess = about Rs 43,550.
How to use this calculator
- Add up your short-term gains on listed equity and equity funds for the financial year.
- Add up your long-term gains (holding over 12 months) for the same year.
- Enter both amounts to see taxable LTCG after the Rs 1.25 lakh exemption.
- Read the LTCG tax, STCG tax and total including 4% cess.
- Use the estimate to plan advance tax and ITR-2 preparation.
Important assumptions
- Applies only to STT-paid listed equity shares and equity-oriented mutual funds.
- Uses post-23 July 2024 rates: 20% STCG (Section 111A) and 12.5% LTCG (Section 112A) above Rs 1.25 lakh.
- Surcharge, loss set-offs, carry-forwards and grandfathering are not modelled.
- Educational estimate only. Verify with official filing utilities, AIS/Form 26AS and a tax professional.
Common mistakes to avoid
- Applying the Rs 1.25 lakh exemption to short-term gains — it applies only to LTCG.
- Forgetting the 4% health and education cess on the tax amount.
- Using these equity rates for debt funds, property or gold, which follow different rules.
- Ignoring capital gains while choosing between ITR-1 and ITR-2.
- Missing advance tax instalments when gains are large, which can trigger interest.
Equity capital gains rules at a glance
For listed equity shares and equity mutual funds where STT is paid, gains on holdings of 12 months or less are short-term and taxed at 20% (Section 111A). Gains on longer holdings are long-term and taxed at 12.5% (Section 112A) on the amount above the Rs 1.25 lakh annual exemption. A 4% health and education cess applies on the computed tax.
- STCG (12 months or less): 20% flat.
- LTCG (over 12 months): 12.5% above Rs 1.25 lakh per year.
- 4% cess on the tax; surcharge may apply at high incomes.
Worked example
Suppose you booked Rs 1,00,000 of short-term gains and Rs 3,00,000 of long-term gains in a year. Taxable LTCG is Rs 3,00,000 - Rs 1,25,000 = Rs 1,75,000, giving LTCG tax of Rs 21,875. STCG tax is 20% of Rs 1,00,000 = Rs 20,000. Total tax is Rs 41,875, and with 4% cess the payable amount is about Rs 43,550.
Capital gains and your ITR form
Capital gains generally push salaried taxpayers from ITR-1 to ITR-2, because ITR-1 does not accommodate capital gains schedules. Keep broker capital-gains statements, and reconcile with AIS and Form 26AS before filing. RupeeKit's ITR-2 guide covers who must file, deadlines and a document checklist.
Harvesting the Rs 1.25 lakh exemption
Because the LTCG exemption resets every financial year, some investors realise long-term gains up to Rs 1.25 lakh annually and reinvest, stepping up their cost base without tax. Weigh transaction costs, exit loads and market risk before using this approach, and keep records for reporting.
Source and Methodology
This calculator applies Section 111A (20% STCG) and Section 112A (12.5% LTCG above Rs 1.25 lakh) rates for STT-paid listed equity, plus 4% health and education cess, to the gain amounts you enter. Surcharge, set-offs and non-equity assets are out of scope. Educational estimate only, not tax advice.
Related calculators and guides
You can cross-check this estimate using: salary in-hand calculator, Old vs New Tax Regime Calculator, 80C deduction calculator, EMI calculator, ITR-2 filing guide, emergency fund guide.
When this tool is useful
- When you want a fast estimate before making a financial or salary decision.
- When you want to compare different assumptions in seconds.
- When you want to understand the formula behind the result.