Capital gains and investments · Tax Year 2025-26
Holding period rules for each asset
A gain is long-term if you held the asset past a minimum period: 12 months for listed shares and equity funds, 24 months for most other assets from 23 July 2024. A few assets are always short-term. Here are the rules.
On this page
The holding period decides whether a gain is short-term or long-term. In TaxCare's rules, for transfers on or after 23 July 2024: listed shares, equity-oriented and UTI units, zero-coupon bonds and business-trust units are long-term after 12 months; every other asset, including property, gold and unlisted shares, is long-term after 24 months.
These are the signed-off rules for the tax year 2025-26. The Income-tax Act, 2025 keeps the same periods from the tax year 2026-27: section 2(101) treats an asset as short-term if held for not more than 24 months, or not more than 12 months for listed securities, UTI units, equity-oriented fund units and zero-coupon bonds.
The table
Asset | Long-term after (transfer on or after 23 Jul 2024) | Before 23 Jul 2024 |
|---|---|---|
Listed shares | 12 months | 12 months |
Equity-oriented mutual fund and UTI units | 12 months | 12 months |
Listed bonds and debentures, zero-coupon bonds | 12 months | 12 months |
Unlisted shares | 24 months | 24 months |
Land and buildings | 24 months | 24 months |
Gold and other property | 24 months | 36 months |
Listed debentures are long-term after 12 months both before and after 23 July 2024.
Assets that are always short-term
- Specified mutual fund units acquired on or after 1 April 2023, such as debt mutual funds, are taxed at slab rates as short-term gains, whatever the holding period.
- Market-linked debentures are short-term whenever acquired.
- Unlisted bonds and unlisted debentures transferred on or after 23 July 2024 are short-term whatever the holding period.
How the holding period is counted
You count from the date you acquired the asset to the date of transfer. TaxCare counts the months between the two dates. If you received the asset as a gift, under a will or by inheritance, the period the previous owner held it counts too, from the date they acquired it. Bonus shares are counted from the date they were allotted, not from the date you bought the original shares.
What changes with the term
| Short-term | Long-term |
|---|---|---|
Listed shares and equity funds (STT paid) | 20% on transfers from 23 July 2024 | 12.5% on the gain above ₹1,25,000 a year |
Property and other assets | Slab rate | 12.5% without indexation |
Land and buildings bought before 23 July 2024 | Slab rate | The lower of 12.5% on the plain gain and 20% on the indexed gain |
Virtual digital assets | 30%, no deductions | 30%, no deductions |
Indexation uses the cost inflation index, published by the department for each year, up to 376 for 2025-26 in TaxCare's table. It is available only for land or buildings acquired before 23 July 2024, for a resident individual or HUF, where it gives a lower tax.
The index for the year of sale is divided by the index for the year of purchase; the 2025-26 index of 376 was notified by CBDT Notification 70/2025.
Worked example
You buy a flat in March 2021 and sell it in April 2025. You held it for more than 24 months, so the gain is long-term. Because you acquired it before 23 July 2024, the tax is the lower of 12.5% on the plain gain and 20% on the indexed gain. If you had sold the same flat after 18 months, the gain would be short-term and taxed at your slab rate.
For the indexed cost, the purchase price is multiplied by 376 (the index for 2025-26, the year of sale) and divided by 301 (the index for 2020-21, the year that March 2021 falls in).
Related rules for property gains
- Stamp duty value. If the stamp duty value of land or a building exceeds the sale price by more than 10%, the stamp duty value is used for the gain.
- New house. A long-term gain can be exempt if you reinvest in a residential house, within caps. The cost of the new house is considered up to ₹10 crore.
- Specified bonds. Investing in specified bonds within six months of the transfer can give an exemption of up to ₹50 lakh in a year.
- Time limits for the new house. For the exemption on selling a residential house, an individual or HUF must buy the new house in India within one year before or two years after the sale, or build it within three years. A gain not used by the return due date can be deposited in the Capital Gains Account Scheme and used within the same period. Selling the new house within three years takes the exemption back.
Losses depend on the term
A short-term loss can be set off against short-term and long-term gains. A long-term loss can be set off only against long-term gains. Both can be carried forward for 8 years if the return is filed on time.
How TaxCare helps
TaxCare applies the holding period lot by lot, for the asset type and transfer date, and puts each lot in the right bucket for the right tax rate. Upload your broker's statement for shares and funds, or enter other assets by hand. See tax on selling shares. For property sales and exemptions, a Tax Expert can help. See Tax Experts.
This guide gives general information and is not professional tax advice.
Questions on this topic
How long must I hold listed shares for long-term gains?
More than 12 months, in TaxCare's rules.
How long for property?
For transfers on or after 23 July 2024, 24 months. Before that date, 24 months for land and buildings and unlisted shares, and 36 months for other assets.
Are some assets always short-term?
Yes. Specified mutual fund units acquired on or after 1 April 2023 and market-linked debentures are deemed short-term whatever the holding period.
Does the holding period change the tax rate?
Yes. Short-term and long-term gains are taxed differently, and the rate also depends on the asset and the transfer date.
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