Long-term capital gains (LTCG)

A long-term capital gain is the profit on listed shares held for more than 12 months. In FY 2026-27 the first ₹1.25 lakh of such gains in a year is tax-free, and the rest is taxed at 12.5% plus 4% cess. Long-term losses can only be set off against long-term gains.

Shares bought before 1 February 2018 use their 31 January 2018 price as the cost, if that is higher than what you paid. This grandfathering rule protects gains made before LTCG tax returned in 2018.

Example. A long-term gain of ₹2 lakh is taxed on ₹75,000, which comes to ₹9,375 plus ₹375 of cess.