What is a Long-Term Capital Gain (LTCG)?
Capital gains are classified based on the holding period. Long-Term Capital Gains (LTCG) include:
| Security Type | Holding Period | Tax Rate |
|---|---|---|
| Equity and equity-oriented mutual funds | More than 1 year | * 10% of gains exceeding Rs. 1 lakh * Gains cannot be indexed * Gains are calculated as per the grandfathering clause |
| Debt mutual funds | NA | Treated as short-term capital gains and taxed as per your income tax slab |
| Listed bonds and debentured | More than 1 year | 10% of the gain, without indexation |
| Unlisted bonds and debentures | More than 3 years | 20% of the gain, without indexation |
For example, Ms Rani buys 100 Tata Motors shares at Rs. 500 per share (Rs. 50,000). She sells them after 2 years for Rs. 75,000. Her gain of Rs. 25,000 will be considered as an LTCG.
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