LTCG — Long-Term Capital Gains

LTCG is the gain you make when you sell a capital asset you have held beyond the long-term holding period. These gains are taxed at special rates that differ from your normal slab.

What it is

A capital gain is the profit from selling a capital asset such as shares, mutual funds, or property. Whether the gain is long-term depends on how long you held the asset. For listed equity shares and equity mutual funds, holding beyond about 12 months generally makes the gain long-term; property and unlisted assets usually require a longer holding period. When a gain qualifies as long-term, it is taxed differently from your salary or business income — under special concessional rates rather than your normal slab.

Why it matters

LTCG is taxed separately from the rest of your income, so it does not simply get added to your slab. Special concessional rates apply, and the exact rate and any exemption threshold depend on the asset class and the date of transfer. Because the rules vary by asset and have changed over time, you should confirm the current figures on the official portal rather than assume a single rate. The type of gain you have also affects which return form you use, which is covered in our capital-gains guide.

Example Illustrative

Suppose you bought listed equity shares and sold them after holding for more than 12 months, making a gain of ₹3,00,000. Because the holding period crosses the long-term threshold, this is a long-term capital gain and is taxed under the special long-term rules rather than your slab. The precise tax depends on the current rate and any threshold, so check the official portal. Figures are illustrative only.