Capital Gains

Capital gains is the profit you make when you sell an asset such as land, buildings, shares, mutual funds, or jewellery for more than you paid for it. Under the Income Tax Act 2025, gains are classified as short-term (assets held for 12 months or less) or long-term (held for more than 12 months). Short-term gains on most assets are added to your regular income and taxed at your slab rate. Long-term gains on listed securities enjoy a lower rate of 12.5% with an exemption of up to ₹1.25 lakh per year under Section 112A. The cost of acquisition is indexed to inflation using the Cost Inflation Index so that inflation is not taxed as profit.