If you sell shares, mutual fund units, a flat, gold or any other investment between 1 April 2026 and 31 March 2027, the gain belongs to FY 2026-27. Most people still call that AY 2027-28, but this is the first year under the Income-tax Act, 2025, and the new Act drops the "assessment year" label. The period is now simply Tax Year 2026-27. The rates have not moved since the July 2024 Budget: 20% on short-term listed equity gains, 12.5% on long-term gains, and ₹1.25 lakh of listed-equity LTCG free each year. What has changed is every section number, the Cost Inflation Index (now 384) and the rule for Sovereign Gold Bonds. This guide sets out the rates, the exemptions and three worked examples you can reproduce in our free calculator.
For FY 2026-27 (AY 2027-28), listed shares and equity mutual funds are taxed at 20% if sold within 12 months and at 12.5% on gains above ₹1.25 lakh if held longer. Property, gold and unlisted shares become long-term after 24 months and are taxed at 12.5% without indexation. Resident individuals and HUFs who bought land or a building before 23 July 2024 can instead pay 20% with indexation when that is lower. Debt mutual funds bought on or after 1 April 2023 are always taxed at slab rates.
Capital Gains Tax Rates for FY 2026-27 (AY 2027-28)
| Asset | Long-term if held | STCG rate | LTCG rate |
|---|---|---|---|
| Listed equity shares | More than 12 months | 20% | 12.5% above ₹1.25 lakh |
| Equity mutual funds (65% or more in equity) | More than 12 months | 20% | 12.5% above ₹1.25 lakh |
| Debt mutual funds bought on or after 1 April 2023 | Never long-term | Slab rate, whatever the holding period | |
| Debt mutual funds bought before 1 April 2023 | More than 24 months | Slab rate | 12.5% without indexation |
| Land, building, residential house | More than 24 months | Slab rate | 12.5% without indexation* |
| Physical gold, jewellery, unlisted shares | More than 24 months | Slab rate | 12.5% without indexation |
| Listed bonds, listed Sovereign Gold Bonds sold on the exchange | More than 12 months | Slab rate | 12.5% without indexation |
| Crypto and other virtual digital assets | Not relevant | 30% flat, only cost of acquisition deductible | |
* Resident individuals and HUFs who acquired the land or building before 23 July 2024 pay the lower of 12.5% without indexation and 20% with indexation. Companies, firms and non-residents do not get this choice. Add surcharge where total income exceeds ₹50 lakh (capped at 15% on these gains) and 4% health and education cess.
What Is Different From AY 2026-27
A new Act and new section numbers. The Income-tax Act, 2025 applies to income earned from 1 April 2026. The capital gains rules were carried over almost word for word, but you will see different numbers on computation sheets, notices and the new return forms.
| What it covers | 1961 Act (up to FY 2025-26) | 2025 Act (from FY 2026-27) |
|---|---|---|
| STCG on listed equity at 20% | Section 111A | Section 196 |
| LTCG on other assets at 12.5% | Section 112 | Section 197 |
| LTCG on listed equity above ₹1.25 lakh | Section 112A | Section 198 |
| Computation and Cost Inflation Index | Section 48 | Section 72 |
| Sale of a residential house, reinvested in a house | Section 54 | Section 82 |
| Investment in NHAI / REC and other notified bonds | Section 54EC | Section 85 |
| Sale of any other asset, reinvested in a house | Section 54F | Section 86 |
Cost Inflation Index of 384. The CBDT notified 384 for FY 2026-27, up from 376. Indexation now matters in one situation only: the 20% comparison for land and buildings bought before 23 July 2024.
Sovereign Gold Bonds. The Finance Act, 2026 restricts the redemption exemption to individuals who subscribed to the bond in the original RBI issue and held it to maturity. If you bought SGBs on the exchange, the gain on redemption is now taxable, so check your contract notes before assuming the maturity proceeds are tax-free.
Return due dates. For Tax Year 2026-27 the due date is 31 July 2027 for ITR-1 and ITR-2 filers, and 31 August 2027 for non-audit business cases after the Finance Act, 2026 amendment. Capital losses can be carried forward only if the return is filed by that date.
Asset-by-Asset Rules
Listed Shares and Equity Mutual Funds
STCG: 20%LTCG: 12.5% above ₹1.25 lakh
Shares and equity fund units held for more than 12 months are long-term. The first ₹1,25,000 of long-term gain in the year is not taxed, and that limit is shared across all your listed-equity sales, not applied per scrip. No indexation is available.
Grandfathering for purchases before 1 February 2018: the cost is the higher of what you actually paid and the lower of (a) the fair market value on 31 January 2018 and (b) the sale price. Broker statements usually apply this, but check the 31 January 2018 price they have used for bonus and split shares.
SIPs: every instalment is a separate purchase with its own 12-month clock, and units are treated as sold first-in, first-out. Use the CAMS or KFintech capital gains statement and do not estimate it yourself.
Rebate: the section 87A rebate does not reduce tax on these special-rate gains under the new regime. See our note on how the 87A rebate works.
House, Land and Buildings
STCG: slab rateLTCG: 12.5%, or 20% with indexation if lower
Property held for more than 24 months is long-term. If you are a resident individual or HUF and acquired it before 23 July 2024, compute the tax both ways and pay the lower figure. The choice does not change the amount of gain for other purposes: a loss that arises only because of indexation cannot be carried forward under the 12.5% route.
Cost: include stamp duty, registration, brokerage and the cost of improvements. For property acquired before 1 April 2001 you may take the fair market value on that date, capped at the stamp duty value where one was available.
Section 54 (now section 82): gain on a residential house is exempt to the extent it is reinvested in one residential house in India, bought within one year before or two years after the sale, or constructed within three years. The investment counted is capped at ₹10 crore. Money not yet used by the return due date has to be parked in the Capital Gains Account Scheme.
Section 54EC (now section 85): up to ₹50 lakh of gain on land or a building can be invested in NHAI, REC or other notified bonds (PFC and IRFC at present) within six months of the sale, with a five-year lock-in.
Stamp duty value: if the agreement value is below the stamp duty value by more than 10%, the stamp duty value is treated as your sale price.
TDS by the buyer: 1% where the consideration is ₹50 lakh or more. Match it with Form 26AS before you compute the balance tax. For non-resident sellers the buyer deducts tax at the capital gains rate on the full amount unless a lower-deduction certificate is obtained.
Debt Mutual Funds
Bought on or after 1 April 2023: slab rate, any holding period
Units of a debt fund (a "specified mutual fund", broadly one investing more than 65% in debt and money market instruments) bought on or after 1 April 2023 are deemed short-term however long you hold them. The gain is still a capital gain, reported in the capital gains schedule and taxed at your slab rate, and it can absorb capital losses.
Units bought before 1 April 2023 become long-term after 24 months and are taxed at 12.5% without indexation.
Gold and Unlisted Shares
STCG: slab rateLTCG: 12.5% without indexation
Both turn long-term after 24 months. For unlisted shares the sale price cannot be lower than the fair market value computed under the valuation rules; our note on Rule 57 and the FMV of unquoted shares explains how that value is worked out. Section 54F (now section 86) is open for both: reinvest the net sale consideration in one residential house and the gain is exempt in the same proportion, provided you do not own more than one other house on the date of sale.
Crypto and Virtual Digital Assets
30% flat, any holding period
The 30% rate continues under the 2025 Act. Only the cost of acquisition is deductible, losses cannot be set off against any other income or carried forward, and Indian exchanges deduct 1% TDS on each sale. If you trade on a foreign exchange there is no TDS, so the whole tax has to be paid as advance tax.
Three Worked Examples for FY 2026-27
Each of these can be reproduced in the calculator by entering the same dates and amounts.
1. Listed shares sold after three years
Shares bought in June 2023 for ₹4,00,000 are sold in October 2026 for ₹7,00,000.
| Long-term capital gain | ₹3,00,000 |
| Less: annual threshold (section 198) | ₹1,25,000 |
| Taxable gain | ₹1,75,000 |
| Tax at 12.5% | ₹21,875 |
| Cess at 4% | ₹875 |
| Total tax | ₹22,750 |
2. Flat bought in 2015 and sold in 2026
A resident individual bought a flat in June 2015 for ₹50,00,000 and sells it in September 2026 for ₹1,20,00,000. CII for FY 2015-16 is 254; for FY 2026-27 it is 384.
| 12.5% without indexation | 20% with indexation | |
|---|---|---|
| Cost taken | ₹50,00,000 | ₹75,59,055 (50,00,000 × 384 / 254) |
| Capital gain | ₹70,00,000 | ₹44,40,945 |
| Tax before cess | ₹8,75,000 | ₹8,88,189 |
The 12.5% route is lower, so the tax is ₹8,75,000 plus 4% cess, ₹9,10,000 in all. Now suppose the seller also puts ₹10,00,000 into section 85 bonds. The gain falls by ₹10 lakh under both routes: ₹60,00,000 at 12.5% is ₹7,50,000, while ₹34,40,945 at 20% is ₹6,88,189. The indexation route now wins. The answer can flip with the exemption you claim, so run both every time.
3. Debt fund bought after April 2023
Units bought in May 2023 for ₹1,00,000 are redeemed in September 2026 for ₹1,50,000. Although held for over three years, the ₹50,000 gain is short-term. For someone in the 30% slab the tax is ₹15,000 plus cess of ₹600, or ₹15,600.
"Most capital gains notices we see come from three things: the wrong holding period, a missed 31 January 2018 value, and property TDS that was never matched with Form 26AS."
Set-Off and Carry-Forward of Capital Losses
| Type of loss | Can be set off against | Carry forward |
|---|---|---|
| Short-term capital loss | Short-term or long-term capital gains | 8 years, if the return is filed by the due date |
| Long-term capital loss | Long-term capital gains only | 8 years, if the return is filed by the due date |
| Crypto / VDA loss | Nothing | Not allowed |
| Speculative loss (intraday equity) | Speculative income only | 4 years, if the return is filed by the due date |
Tax-loss harvesting before 31 March 2027 still works: a long-term loss booked this year reduces long-term gains above the ₹1.25 lakh threshold. Losses brought forward from earlier years under the 1961 Act continue to be available under the 2025 Act.
Selling Property or a Large Holding This Year?
Speak to us before the sale, not after. We work out the tax under both routes, plan the section 82, 85 or 86 reinvestment and its timelines, and compute the advance tax so that no interest builds up.
Book a ConsultationAdvance Tax on Capital Gains in FY 2026-27
Capital gains tax is not something you settle only when you file the return in July 2027. If your total tax for the year, after TDS, is ₹10,000 or more, it has to be paid as advance tax during the year.
- Instalments fall due on 15 June (15%), 15 September (45%), 15 December (75%) and 15 March (100%).
- A capital gain cannot be predicted, so the law gives a concession: if the gain arises after an instalment date, pay the tax on it in the remaining instalments and no interest for deferment is charged. A sale in October 2026 is covered by the 15 December 2026 and 15 March 2027 instalments. A sale after 15 March must be paid for by 31 March 2027.
- If less than 90% of the year's tax has been paid by 31 March 2027, interest at 1% a month runs from 1 April 2027 until the balance is paid.
- Resident senior citizens with no business income are not required to pay advance tax.
Use our advance tax calculator to split the liability across instalments.
Frequently Asked Questions
Is AY 2027-28 the same as Tax Year 2026-27?
Yes. Income earned from 1 April 2026 to 31 March 2027 would have been called AY 2027-28 under the old Act. The Income-tax Act, 2025 calls it Tax Year 2026-27 and no longer uses "assessment year" for it.
What is the LTCG exemption limit on shares for FY 2026-27?
₹1,25,000 for the year across all listed shares and equity mutual funds. Gains above that are taxed at 12.5% under section 198.
What is the Cost Inflation Index for FY 2026-27?
384, notified by the CBDT in July 2026. For FY 2025-26 it was 376.
Can I still use indexation when I sell property?
Only if you are a resident individual or HUF and the land or building was acquired before 23 July 2024. You then pay the lower of 12.5% without indexation and 20% with indexation.
Can I claim section 54F on the sale of shares?
Yes. Section 54F, now section 86, covers any long-term asset other than a residential house. The exemption is proportionate to the share of the net sale consideration invested in one residential house, subject to the ₹10 crore cap and the condition on owning other houses.
Sources & References
- Authority: Income Tax Department, Government of India. Title: Income-tax Act, 2025 (as amended by the Finance Act, 2026), sections 67 to 91 and 196 to 198. View Source. Accessed: September 2026.
- Authority: CBDT. Title: Notification No. 85/2026, Cost Inflation Index for FY 2026-27. Accessed: September 2026.
Written by CA Karan Shah
Founder of KC Shah & Associates. With over 5 years of experience in income tax, GST, and virtual CFO services, Karan helps startups and SMEs across India achieve financial clarity and stay audit-ready.