Budget 2024-2025: Long-term capital gains tax increased to 12.5% from 10%

The Finance Minister today announced changes to the capital gains tax structure in India. The tax on long-term capital gains (profits from selling assets held for more than two year) has been increased from 10 per cent to 12.5 per cent.

For listed financial assets, the holding period to qualify for long-term capital gains has been kept at more than one year.

Short-Term Capital Gains Tax: If you sell a financial asset within a year of purchase, it's considered short-term, and the tax rate on the profit is 20%.

In essence, holding an investment for a longer period now attracts a higher tax, while short-term gains continue to be taxed at a higher rate of 20%.

Listed financial assets held for more than a year will be classified as long term.