Question 1

What are the new capital gains tax rates after Budget 2024?

Accepted Answer

Budget 2024 introduced significant changes: **Equity LTCG** increased from 10% to **12.5%** (with exemption limit raised to Rs 1.25 lakh), **Equity STCG** increased from 15% to **20%**, and **Property LTCG** is now **12.5%** without indexation benefit for properties acquired after July 23, 2024. Debt mutual funds continue to be taxed at slab rates with no indexation benefit.

Question 2

How is the holding period calculated for determining LTCG vs STCG?

Accepted Answer

The holding period threshold varies by asset type: **Equity shares and equity mutual funds** require 12+ months for LTCG treatment. **Property and gold** require 24+ months. **Debt mutual funds** require 36+ months. If you sell before these thresholds, gains are classified as Short-Term Capital Gains (STCG) and taxed at higher rates.

Question 3

What is the Rs 1.25 lakh exemption for equity LTCG?

Accepted Answer

For listed equity shares and equity-oriented mutual funds held for more than 12 months, the first **Rs 1.25 lakh of LTCG per financial year is exempt** from tax. Only gains exceeding this threshold are taxed at 12.5%. This exemption was increased from Rs 1 lakh in Budget 2024.

Question 4

Can I carry forward capital losses to set off against future gains?

Accepted Answer

Yes! **Short-term capital losses** can be set off against both STCG and LTCG. **Long-term capital losses** can only be set off against LTCG. Unabsorbed losses can be carried forward for up to **8 assessment years**. Remember to file your ITR before the due date to claim this carry-forward benefit.

Question 5

What is the impact of removing indexation for property after July 2024?

Accepted Answer

For properties acquired after July 23, 2024, you can no longer adjust the purchase cost for inflation (indexation). While the LTCG rate was reduced to 12.5%, this may result in **higher taxes for long-held properties** where inflation adjustment would have significantly reduced taxable gains. Properties acquired before this date can still choose between the old regime (20% with indexation) or new regime (12.5% without).

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