Long Term Capital Gain

Long-Term Capital Gain arises when you sell an asset after holding it for a longer duration, as defined by tax laws. LTCG generally enjoys lower tax rates and benefits, making it attractive for long-term investors.

Holding Period (India)

• Equity shares & equity mutual funds: More than 1 year
• Real estate/property: More than 2 years
• Debt funds & other assets: More than 3 years

Taxation of LTCG in India

• Equity (with STT):
  • 10% tax on gains above ₹1 lakh (without indexation)
• Property & other assets:
  • 20% tax with indexation benefit

Tax rules are governed by the Income Tax Department of India.

Key Benefits

• Lower tax rates compared to short-term gains
• Indexation benefits (for certain assets)
• Encourages long-term wealth creation

LTCG is ideal for investors who follow a long-term investment strategy and want to maximize returns with tax efficiency.

"You invest ₹1,00,000 in shares and sell them after 2 years for ₹1,50,000. The profit of ₹50,000 is considered Long-Term Capital Gain and taxed as per LTCG rules."