Capital Gains Tax in New Act 2025: STCG and LTCG Rules
- Core rules unchanged. STCG and LTCG rates and holding periods are the same. Only section numbers have changed.
- Section 45 (charging section) is now Section 67. Section 54 (reinvestment exemption) is now Section 82.
- Listed equity: STCG (Section 111A → 196) at 15%. LTCG (Section 112A → 198) at 10% above Rs 1 lakh.
- Indexation benefit continues on real estate and debt mutual funds held long-term.
If you are selling property, shares, mutual funds, or any other capital asset, you need to know how capital gains tax works under the new Income Tax Act 2025. The core rules remain the same, but every section number has changed. Here is the complete mapping.
Key Section Mapping: Old to New
Short-Term Capital Gains (STCG)
Assets held for less than the specified period are short-term. The rules remain unchanged:
- Listed equity and equity mutual funds (held less than 12 months): Taxed at 15% under new Section 196 (old 111A). STT must have been paid on the transaction.
- Other assets (property, gold, debt funds, unlisted shares): Taxed at your normal slab rate. Holding period thresholds remain the same (24 months for property, 36 months for others).
Long-Term Capital Gains (LTCG)
- Listed equity and equity mutual funds (held 12+ months): Gains above Rs 1 lakh taxed at 10% under new Section 198 (old 112A). No indexation benefit.
- Property, gold, debt funds (held beyond specified period): Taxed at 20% with indexation benefit under new Section 197 (old 112).
Capital Gains Exemptions: All Continue
Sell a residential property, buy another within 2 years or construct within 3 years. Gains exempt up to the new property's cost.
Invest long-term gains in NHAI or REC bonds within 6 months. Maximum Rs 50 lakh. 5-year lock-in.
Sell any long-term asset other than a house, invest the entire sale proceeds in a residential house. Full exemption if the net consideration is invested.
Sale of agricultural land, reinvested in agricultural land within 2 years.
Rates, holding periods, exemption conditions, and indexation rules are all identical. Only the section numbers change on the ITR form. Tax software handles the mapping automatically from FY 2026-27.
Frequently Asked Questions
What is the new section for capital gains tax?
Section 45 (charging section for capital gains) is now Section 67 under the Income Tax Act 2025. STCG on equity is Section 196 (old 111A) and LTCG on equity is Section 198 (old 112A).
What is the LTCG tax rate on shares and mutual funds?
Long-term capital gains on listed equity shares and equity mutual funds above Rs 1 lakh are taxed at 10% under Section 198 (old 112A). No indexation benefit is available on these gains.
Can I save capital gains tax on a property sale?
Yes. Under Section 82 (old Section 54), reinvest in another residential property within 2 years (or construct within 3 years) to claim exemption. You can also invest up to Rs 50 lakh in NHAI / REC bonds under Section 85 (old 54EC).
What is the holding period for long-term capital gains on property?
For immovable property, the holding period is 24 months. If you hold a property for more than 24 months before selling, the gains qualify as long-term and are taxed at 20% with indexation.
For property-specific TDS at the buyer end (1% TDS above Rs 50L), see Section 194-IA now Section 393. For home loan tax benefits when buying that next property, see home loan benefits 2025.
Disclaimer: This article provides general information about the Income Tax Act 2025 and is not tax advice. Capital gains calculations depend on your specific situation. Consult a qualified Chartered Accountant before making investment decisions.
Selling Property or Investments?
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