Guides / Capital Gains Tax on Shares and Equity Mutual Funds (FY 2026-27)
Capital Gains Tax on Shares and Equity Mutual Funds (FY 2026-27)
3 Oct 2026When you sell shares or equity mutual funds at a profit, the profit is taxed as capital gains. The rate depends on how long you held them.
The rules for FY 2026-27
| Holding period | Type | Tax rate |
|---|---|---|
| 12 months or less | Short-term | 20% |
| More than 12 months | Long-term | 12.5% on gains above ₹1.25 lakh a year |
Add 4% cess. These rates apply to listed equity shares and equity-oriented mutual funds, and Budget 2026 made no change to them.
Example: ₹5 lakh grows to ₹8 lakh
| Case | Tax |
|---|---|
| Sold after 18 months (long-term) | ₹22,750 |
| Sold after 8 months (short-term) | ₹62,400 |
In the long-term case, only ₹1.75 lakh (₹3 lakh minus the ₹1.25 lakh exemption) is taxed. Waiting past 12 months saved about ₹39,650. Try your numbers in the Capital Gains Tax Calculator.
Smart habits
- Check the holding period before you sell.
- Use the ₹1.25 lakh exemption each year by booking some long-term gains, if it suits your plan.
- Keep records of buy dates and prices.
- Remember that other assets, such as debt funds, gold and property, follow different rules.
Rules change, and the Income-tax Act 2025 has renumbered sections. Confirm the latest rules before filing.
Try the Capital Gains Tax Calculator