{"id":7652,"date":"2025-07-11T07:45:46","date_gmt":"2025-07-11T07:45:46","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?post_type=glossary&#038;p=7652"},"modified":"2025-07-11T07:48:21","modified_gmt":"2025-07-11T07:48:21","slug":"capital-gains-tax-3","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/capital-gains-tax-3\/","title":{"rendered":"Capital Gains Tax"},"content":{"rendered":"<p><strong><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/capital-gains-tax\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Capital Gains Tax<\/a><\/strong> is the <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/tax\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>tax<\/a> you pay when you <strong>sell something valuable<\/strong>&mdash;like property, <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/shares\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>shares<\/a>, gold, or <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/mutual-fund\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">mutual fund<\/a>s&#x2014;for a <strong>profit<\/strong>.<br>This profit is called a <strong><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/capital-gain\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">capital gain<\/a><\/strong>, and the tax on it is called <strong>capital gains tax<\/strong>.<\/p>\n\n\n\n<h2 id=\"what-is-capital-gain-in-simple-words\" class=\"wp-block-heading\"><strong>What is Capital Gain in Simple Words?<\/strong><\/h2>\n\n\n\n<p>If you bought something at &#x20B9;1 lakh and sold it for &#x20B9;2 lakh, the extra &#x20B9;1 lakh is your <strong>capital gain<\/strong>.<br>The government taxes this profit as <strong>Capital Gains Tax<\/strong>.<\/p>\n\n\n\n<h2 id=\"types-of-capital-gains\" class=\"wp-block-heading\"><strong>Types of Capital Gains<\/strong><\/h2>\n\n\n\n<p>There are <strong>two main types<\/strong> based on how long you hold the asset:<\/p>\n\n\n\n<h3 id=\"1-short-term-capital-gain-stcg\" class=\"wp-block-heading\">1. <strong>Short-Term Capital Gain (STCG)<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Asset is sold <strong>within a short period<\/strong><\/li>\n\n\n\n<li>The holding period depends on the asset type<\/li>\n<\/ul>\n\n\n\n<h3 id=\"2-long-term-capital-gain-ltcg\" class=\"wp-block-heading\">2. <strong>Long-Term Capital Gain (LTCG)<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Asset is held for <strong>a longer period<\/strong><\/li>\n\n\n\n<li>Gains are taxed at a lower rate but have different rules<\/li>\n<\/ul>\n\n\n\n<h2 id=\"capital-gains-tax-based-on-asset-type\" class=\"wp-block-heading\"><strong>Capital Gains Tax Based on Asset Type<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>Asset Type<\/th><th>STCG Holding Period<\/th><th>LTCG Holding Period<\/th><th>STCG Tax Rate<\/th><th>LTCG Tax Rate<\/th><\/tr><\/thead><tbody><tr><td>Listed Shares<\/td><td>&lt; 12 months<\/td><td>&gt; 12 months<\/td><td>15%<\/td><td>10% above &#x20B9;1 lakh (no <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/indexation\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">indexation<\/a>)<\/td><\/tr><tr><td><a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/equity\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>Equity<\/a> Mutual Funds<\/td><td>&lt; 12 months<\/td><td>&gt; 12 months<\/td><td>15%<\/td><td>10% above &#x20B9;1 lakh<\/td><\/tr><tr><td>Debt Mutual Funds<\/td><td>&lt; 36 months<\/td><td>&gt; 36 months<\/td><td>As per slab<\/td><td>As per slab<\/td><\/tr><tr><td>Real Estate<\/td><td>&lt; 24 months<\/td><td>&gt; 24 months<\/td><td>As per slab<\/td><td>20% with <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/index\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>index<\/a>ation<\/td><\/tr><tr><td>Gold<\/td><td>&lt; 36 months<\/td><td>&gt; 36 months<\/td><td>As per slab<\/td><td>20% with indexation<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\">\n\n\n\n<h2 id=\"indexation-in-ltcg\" class=\"wp-block-heading\"><strong>Indexation in LTCG<\/strong><\/h2>\n\n\n\n<p>For <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/assets\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>assets<\/a> like real estate, gold, and debt mutual funds, you can adjust the purchase price using <strong><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/cost-inflation-index\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Cost Inflation Index<\/a> (CII)<\/strong>.<br>This lowers your taxable gain and reduces your tax.<\/p>\n\n\n\n<h2 id=\"simple-example-of-capital-gains-tax\" class=\"wp-block-heading\"><strong>Simple Example of Capital Gains Tax<\/strong><\/h2>\n\n\n\n<p><strong>Example 1 &#x2013; Short-Term (Shares):<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Buy shares for &#x20B9;1 lakh<\/li>\n\n\n\n<li>Sell in 6 months for &#x20B9;1.5 lakh<\/li>\n\n\n\n<li>STCG = &#x20B9;50,000<\/li>\n\n\n\n<li>Tax = 15% of &#x20B9;50,000 = &#x20B9;7,500<\/li>\n<\/ul>\n\n\n\n<p><strong>Example 2 &#x2013; Long-Term (Property):<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Buy land for &#x20B9;10 lakh in 2010<\/li>\n\n\n\n<li>Sell for &#x20B9;40 lakh in 2025<\/li>\n\n\n\n<li>Indexed cost = &#x20B9;25 lakh (say)<\/li>\n\n\n\n<li>LTCG = &#x20B9;15 lakh<\/li>\n\n\n\n<li>Tax = 20% of &#x20B9;15 lakh = &#x20B9;3 lakh<\/li>\n<\/ul>\n\n\n\n<h2 id=\"capital-gains-exemptions\" class=\"wp-block-heading\"><strong><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/capital-gains-exemption\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Capital Gains Exemption<\/a>s<\/strong><\/h2>\n\n\n\n<p>You can reduce or avoid capital gains tax by using sections like:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>54<\/strong> &#x2013; Buy another house<\/li>\n\n\n\n<li><strong>54F<\/strong> &#x2013; Sell any asset, buy a house<\/li>\n\n\n\n<li><strong>54EC<\/strong> &#x2013; Invest in <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/government-bonds\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">government bonds<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Capital Gains Tax is the tax you pay when you sell something valuable&#x2014;like property, shares, gold, or mutual funds&#x2014;for a profit.This profit is called a capital gain, and the tax on it is called capital gains tax. What is Capital Gain in Simple Words? If you bought something at &#x20B9;1 lakh and sold it for [&#x2026;]<\/p>\n","protected":false},"author":9,"featured_media":0,"menu_order":0,"template":"","meta":{"footnotes":""},"class_list":["post-7652","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7652","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/9"}],"version-history":[{"count":1,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7652\/revisions"}],"predecessor-version":[{"id":7653,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7652\/revisions\/7653"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=7652"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}