What is LTCG Tax on Stocks in India?

Long-Term Capital Gains (LTCG) on listed equity shares are sold after 12 months from the date of purchase “at a profit”. After the latest amendments introduced in the Union Budget 2026, for listed equity shares covered under Section 112A, the LTCG tax rate is 12.5% on gains exceeding ₹1.25 lakh in a financial year.

Note: The ₹1.25 lakh threshold applies to the aggregate eligible LTCG covered under Section 112A and not separately to each stock. 

Long-Term Capital Gains Tax India 2026 Example

Suppose an investor buys listed equity shares for ₹4 lakh and sells them after more than 12 months for ₹7 lakh. In this case, the long-term capital gain is ₹3 lakh (₹7 lakh – ₹4 lakh). 

After accounting for an annual LTCG exemption of ₹1.25 lakh, the taxable LTCG is ₹1.75 lakh (₹3 lakh – ₹1.25 lakh). Applying the LTCG tax @ 12.5%, the tax liability comes out to be ₹21,875, before applicable surcharge and cess.

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