Capital Gains Calculator

What is Capital Gain?

The assets owned by an individual that may or may not be connected with business or profession are called capital assets. The common examples of capital assets include bonds, mutual funds, jewelry, patents, or trademarks. However, furniture and clothes for personal use, rural agricultural land are not capital assets.

The LTCG or long-term capital gains tax is charged on the profit generated from an asset such as shares, bonds, commodities, or real estate that is held for the long-term. The period of holding, which is ‘short term’ or ‘long term’ differs across various assets. It is defined as per the Income Tax Act, 1961.

The table below shows you how the capital assets are classified as short-term or long-term based on the holding period.

Taxation of Long Term Capital Gain

The tax rate of long term capital gains for FY 2024-25 depends on the date of transfer.

For the transfers that happened before 23/07/2024, the following are the tax rates

For the transfers that happened on or after 23/07/2024, the following are the tax rates.

Taxation of Short Term Capital Gain

What is an LTCG Calculator (Long Term Capital Gains Tax Calculator)?

The long-term capital gains or LTCG Calculator is a utility tool, which shows you the long-term capital gains and the LTCG tax liability, for equity-oriented mutual funds and listed equity shares.

The LTCG Calculator consists of a formula box, where you enter the holding period, the purchase value, and the sale value of the equity-oriented fund. The calculator will display the taxable short-term capital gain or long-term capital gain, depending on the holding period.

How Does LTCG Calculators Work?

You can understand the working of an LTCG calculator with this example. You purchased 200 shares of XYZ Company Ltd at Rs 1,000 per share in May 2018. You sold all the 200 shares at Rs 1,800 per share in January 2025.

You have held the shares for more than one year. The profit of Rs 1,60,000 (200*1800 – 200*1000) is called long-term capital gains.

You have to pay the long-term capital gains tax on the gains that are above Rs 1.25 lakh in a financial year. Since the transfer happened on or after 23/07/2024,You have the LTCG tax on Rs 35,000. (Rs 1,60,000 – Rs 1,25,000) at 12.5%. You pay a long-term capital gains tax of Rs 4,375. (Rs 35,000@12.5%).

Suppose you sold the 400 shares in May 2024 when the share price was Rs 1,500 per share. The total purchase value of your 400 shares in January 2019 was Rs 2,00,000. You have held the shares for more than one year. The profit of Rs 4,00,000 (400*1500 – 200*1000). Since exemption of Rs.1,25,000 is still available for transfers happened before 23/07/2024, taxable capital gains is Rs. 2,75,000.

You must pay long-term capital gains tax at 10% on the long-term capital gains which is Rs 2,75,000 *10% = Rs 27,500.

The announcement for the introduction of the long-term capital gains tax on equity-oriented instruments and shares was made during the Union Budget 2018. The new rule was applicable for all the transactions that are made on or after 01 April 2018.

How to Use the ClearTax LTCG Calculator?

• You must choose the period when you sold the shares or equity-oriented mutual fund units. If you select before 31 March 2018, there is no long-term capital gains tax on the investment. If you choose after 01 April 2018, you will incur a long-term capital gains tax.
• You then select the holding period as less than one year if you have held the investment for the requisite period.
• You must enter the sale value and the purchase value of the investment.
• The ClearTax LTCG Calculator will show you the short-term capital gain and STCG taxes.
• You must select the holding period as more than one year if you have invested for this duration.
• You then select the sale value of the investment.
• You must select the date of purchase of the units as after 31 January 2018 or before 31 January 2018 as applicable.
• If you select the latter option, the calculator will ask you for the fair market value.
• The ClearTax LTCG Calculator will show you the long-term capital gain and LTCG taxes.

Benefits of Using the ClearTax LTCG Calculator?

• The ClearTax LTCG Calculator will show you the long-term capital gains tax on the purchase and sale of equity-oriented funds and shares in a matter of seconds.
• You get a birds-eye view of the actual return from the investment after accounting for the taxes. It helps you to plan the duration of the investment in equity funds and shares for maximum tax-efficiency.
• You can plan the investments in equity instruments as you already know the short-term or long-term capital gains tax you would incur depending on the holding period.