Comprehensive Guide to Capital Gains Tax for FY 2024–25 (AY 2025–26):

• by Vaibhav
• Updated: October 06th, 2025

ITR Filing for Listed & Unlisted Equity, Gold, Real Estate, and Other Capital Assets

Effective July 23, 2024, revisions to the capital gains tax rules have come into force for the financial year 2024-25. Given that these changes were implemented mid-year, both the previous and revised provisions will be applicable—depending on the specific date of sale or transfer of the asset.

Taxpayers preparing to file their Income Tax Return (ITR) for FY 2024-25 (Assessment Year 2025-26) are advised to exercise due diligence in computing capital gains and the corresponding tax liability. Accurate classification and reporting are essential to ensure compliance with the updated regulations.

Revised Capital Gains Provisions for House Property – Effective July 23, 2024

As of July 23, 2024, new guidelines for calculating capital gains on house property transactions have been introduced. These updated provisions vary based on the residential status of the individual taxpayer.

According to industry experts, taxpayers must first determine their residential classification—Resident and Ordinarily Resident (ROR), Resident but Not Ordinarily Resident (RONR), or Non-Resident (NR)—to identify the applicable rules under the new framework.

While the treatment of Short-Term Capital Gains (STCG) remains consistent across all residential categories, the computation of Long-Term Capital Gains (LTCG) will now differ depending on the taxpayer’s residential status.

Updated STCG and LTCG Guidelines for House Property Transactions

Capital gains arising from the sale of residential property are categorized as either Short-Term Capital Gains (STCG) or Long-Term Capital Gains (LTCG), based on the holding period of the asset.

• A sale will be classified as STCG if the property is sold within two years from the date of acquisition or completion of construction. In such cases, the gains are taxed as per the applicable income tax slabs, aligned with the taxpayer's chosen tax regime—whether the old or new regime. This tax treatment applies uniformly, regardless of the individual's residential status.

• Conversely, if the property is sold after two years from the date of purchase or construction, the resulting gains will be treated as LTCG. Under the revised rules, effective from July 23, 2024, the applicable tax rate for LTCG will vary depending on the taxpayer’s residential status and the date of acquisition.

Revised LTCG Tax Structure for Sale of Residential Property – Effective July 23, 2024

For residential properties purchased on or before July 22, 2024 and sold on or after July 23, 2024, resident individuals and Hindu Undivided Families (HUFs) will have the option to calculate Long-Term Capital Gains (LTCG) tax using the more beneficial of the following two methods:

• With Indexation: The purchase cost is adjusted for inflation using the Cost Inflation Index (CII) published by the Income Tax Department. The indexed gains are then taxed at 20%.

• Without Indexation: The purchase cost is not adjusted for inflation, and the LTCG is taxed at a flat rate of 12.5% on the absolute gains.

The adjustment of the purchase price using the CII is referred to as the Indexation Benefit, which helps reduce the taxable gain by accounting for inflation over time.

For properties acquired on or after July 23, 2024, the indexation benefit is no longer available. In such cases, LTCG will be taxed at a flat rate of 12.5% on the full capital gain, without any inflation adjustment.

This tax structure applies equally to Resident and Ordinarily Resident (ROR) and Resident but Not Ordinarily Resident (RONR) taxpayers. For Non-Resident Indians (NRIs), the LTCG on the sale of residential property will be taxed at 12.5% on the absolute gain, regardless of the date of purchase.

Capital Gains Taxation for House Property Sold on or Before July 22, 2024

For house property transactions completed on or before July 22, 2024, the previous capital gains tax provisions remain applicable.

The holding period criteria for determining Short-Term and Long-Term Capital Gains are consistent across both the old and new tax frameworks. Similarly, Short-Term Capital Gains (STCG) will continue to be taxed as per the applicable income tax slab rates, regardless of the taxpayer’s residential status.

Under the old rules, Long-Term Capital Gains (LTCG) from the sale of house property are taxed at a rate of 20%, after adjusting the purchase price for inflation using the Cost Inflation Index (CII)—a benefit known as indexation.

These rules applied uniformly across all categories of taxpayers, including residents, non-residents, and HUFs.

Updated Capital Gains Tax Rules for Equity Shares – Effective July 23, 2024

Beginning July 23, 2024, revised capital gains tax provisions apply to transactions involving equity shares. The applicable tax treatment depends on whether the equity shares are listed on a recognized stock exchange or unlisted.

The holding period criteria used to classify gains as Short-Term Capital Gains (STCG) or Long-Term Capital Gains (LTCG) differ between listed and unlisted shares. Taxpayers must refer to the nature of the equity instrument to determine the appropriate classification and applicable tax rates.

Revised STCG and LTCG Taxation for Listed Equity Shares – Effective July 23, 2024

Effective July 23, 2024, updated capital gains tax rules apply to the sale of listed equity shares, and these rules are uniform across all individual taxpayers, regardless of residential status—whether Resident and Ordinarily Resident (ROR), Resident but Not Ordinarily Resident (RONR), or Non-Resident (NR).

Short-Term Capital Gains (STCG): Gains from the sale of listed equity shares held for one year or less will be classified as STCG. Such gains, realized on or after July 23, 2024, will be taxed at a flat rate of 20%, plus applicable cess.

Long-Term Capital Gains (LTCG): Gains from listed shares held for more than one year will be treated as LTCG. From July 23, 2024, these gains will be taxed at a rate of 12.5%, after deducting the applicable exemption.

Taxpayers are eligible to claim a combined LTCG exemption of up to ₹1.25 lakh for the financial year 2024–25 on gains from listed equity shares and equity mutual funds. The 12.5% tax rate applies only to the portion of gains exceeding the exemption limit.

Capital Gains Taxation for Listed Equity Shares Sold on or Before July 22, 2024

Under the capital gains regime applicable up to July 22, 2024, the holding period criteria for determining Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG) on listed equity shares remain unchanged compared to the new rules. These provisions apply uniformly to all individuals, irrespective of their residential status—Resident and Ordinarily Resident (ROR), Resident but Not Ordinarily Resident (RONR), or Non-Resident (NR).

Short-Term Capital Gains (STCG):

Listed equity shares sold within one year of acquisition are classified as STCG. Under the old tax rules, these gains are taxed at a concessional rate of 15%, plus 4% cess.

Long-Term Capital Gains (LTCG):

Listed shares sold after one year are considered LTCG. As per the old provisions, LTCG is taxed at 10%, without indexation, for gains exceeding the exemption threshold.

Exemption Limit:

A cumulative exemption of up to ₹1.25 lakh on LTCG from listed equity shares and equity-oriented mutual funds remains applicable for FY 2024–25, regardless of the sale date.

Special Note on Securities Transaction Tax (STT):

These tax treatments apply only where STT has been paid at the time of sale or redemption of the listed shares. If STT is not paid, the tax treatment differs:

• STCG (No STT Paid): Taxed as per the individual's applicable income tax slab, under both old and new rules.
• LTCG (No STT Paid):
  • Under the old rules: Taxed at the lower of 20% with indexation or 10% without indexation.
  • Under the new rules (effective July 23, 2024): Taxed at a flat 12.5% without indexation.

Taxpayers are advised to confirm whether STT was paid at the time of redemption to ensure the correct capital gains tax rate is applied.

Updated Capital Gains Taxation for Unlisted Equity Shares – Effective July 23, 2024

Starting July 23, 2024, revised tax rules apply to the sale of unlisted equity shares. These provisions are uniform across all individual taxpayers, irrespective of residential status—whether Resident and Ordinarily Resident (ROR), Resident but Not Ordinarily Resident (RONR), or Non-Resident (NR).

• Short-Term Capital Gains (STCG): Gains from the sale of unlisted equity shares held for two years or less will be classified as STCG. Such gains will be taxed according to the individual's applicable income tax slab rates, depending on the selected tax regime.

• Long-Term Capital Gains (LTCG): If the unlisted shares are sold after two years, the gains will be treated as LTCG. These will be taxed at a flat rate of 12.5%, without indexation—i.e., the purchase cost cannot be adjusted for inflation.

Additional Consideration for Non-Resident Individuals (NRIs): NRIs should note that under the new regime, no benefit is provided for foreign exchange fluctuations in the computation of capital gains on unlisted equity shares.

Capital Gains Taxation for Unlisted Equity Shares – Applicable Until July 22, 2024

Under the capital gains tax regime in effect until July 22, 2024, the treatment of gains from unlisted equity shares differs based on the residential status of the taxpayer, particularly in the case of Long-Term Capital Gains (LTCG).

• Short-Term Capital Gains (STCG): Gains from the sale of unlisted equity shares held for two years or less are considered STCG and are taxed as per the individual’s applicable income tax slab, regardless of residential status.

• Long-Term Capital Gains (LTCG): If unlisted equity shares are sold after two years, the treatment of LTCG depends on the taxpayer’s residential classification:

• • For Resident and Ordinarily Resident (ROR) and Resident but Not Ordinarily Resident (RONR) individuals: LTCG is taxed at 20% with indexation, allowing adjustment of the purchase cost for inflation.
  • For Non-Resident Indians (NRIs): LTCG is taxed at 10% without indexation, and no benefit is provided for foreign exchange fluctuations.

The capital gains tax framework for unlisted preference shares mirrors that of unlisted equity shares under both old and new rules.

Gold, Other Assets, and Holding Period Simplification

The revised rules effective from July 23, 2024, have introduced a standardized approach to holding periods for listed and unlisted securities, as well as non-financial assets:

• For listed financial assets (e.g., shares traded on a recognized stock exchange):
  • Gains from sales within one year are classified as STCG.
  • Gains from sales after one year are classified as LTCG.

• For unlisted securities and non-financial assets (e.g., gold, real estate):
  • Gains from sales within two years are treated as STCG.
  • Gains from sales after two years are treated as LTCG.

This alignment simplifies compliance and provides greater clarity for investors across asset classes.

Revised Capital Gains Taxation on Gold – Effective July 23, 2024

From July 23, 2024, updated capital gains tax rules apply to the sale of gold, aligning with the simplified holding period norms for non-financial assets.

• Short-Term Capital Gains (STCG):  Gains arising from the sale of gold held for two years or less will be classified as STCG. These gains will be added to the taxpayer’s total income and taxed according to the applicable income tax slab rates.

• Long-Term Capital Gains (LTCG):  Gains from the sale of gold held for more than two years will be classified as LTCG. Under the new regime, such gains will be taxed at a flat rate of 12.5%, without the benefit of indexation—i.e., the purchase cost cannot be adjusted for inflation.

Capital Gains Taxation on Gold – Applicable Until July 22, 2024

Under the earlier tax framework, the classification and taxation of capital gains from the sale of gold are based on a three-year holding period. These rules apply uniformly to all individuals, regardless of residential status, and are applicable to both physical and digital gold. Please note that gold mutual funds and gold ETFs follow different tax provisions.

• Short-Term Capital Gains (STCG):  Gains from the sale of gold held for three years or less are considered STCG. Such gains are added to the individual’s total income and taxed at the applicable income tax slab rates.

• Long-Term Capital Gains (LTCG):  If the gold is sold after three years, the resulting gains are classified as LTCG. Under the old regime, LTCG on gold is taxed at 20% with indexation, allowing the purchase cost to be adjusted for inflation.

The STCG and LTCG tax treatment under both the old and new rules is consistent across all individual taxpayers, irrespective of residential status.

Disclaimer: The views and information shared here are for general awareness only. Please seek professional advice before making any financial or legal decisions.