📘 Understanding Capital Gains Tax Changes in India: Before and After 23rd July 2024
- CA Sonith Shetty
- Aug 11
- 4 min read
Explore how India’s capital gains tax rules changed on 23rd July 2024 with practical, client-focused examples. Covers equity shares, mutual funds, real estate, NRI taxation, and more.
🔍 Overview: What's Changed from 23rd July 2024?
India introduced a restructured capital gains taxation regime effective 23rd July 2024, with the aim of simplifying and unifying tax treatment across asset classes. Here are the highlights:
Uniform LTCG rate of 12.5% across all asset types (with limited indexation).
STCG on listed shares now taxed at 20% (up from 15%).
LTCG exemption threshold raised from ₹1 lakh to ₹1.25 lakh per financial year.
Reduced holding period for non-equity assets: From 36 months to 24 months for LTCG classification.
🧾 Capital Gains Examples Before 23rd July 2024
Example 1: Equity Shares Sold Before 23 July 2024
Mr. Ajay bought 500 shares at ₹200 each on 10 Jan 2022.
Sold on 1 June 2024 at ₹300 each.
Holding >12 months → Long-Term
LTCG = (₹300 - ₹200) × 500 = ₹50,000
Exempt up to ₹1 lakh → Entirely exempt
Tax Payable: ₹0
Example 2: LTCG Exceeding Exemption Limit Before 23 July
Mr. Sameer sold shares on 20 June 2024; LTCG = ₹1.80 lakh
Exemption: ₹1 lakh → Taxable: ₹80,000
Tax @10% (without indexation) = ₹8,000
Example 3: Sale of Land in April 2024
Purchased: ₹20 lakh (in 2010)
Sold: ₹70 lakh
Indexed Cost (CII): ₹20L × (348/167) = ₹41.67L
LTCG = ₹70L - ₹41.67L = ₹28.33L
Tax @20% with indexation = ₹5.67 lakh
🧾 Capital Gains Examples After 23rd July 2024
Example 4: Equity Shares Sold Post 23 July 2024
Bought in Aug 2022 for ₹1,00,000
Sold in Aug 2025 for ₹1,80,000 → LTCG = ₹80,000
Exemption: ₹1.25 lakh → Tax Payable: ₹0
Example 5: LTCG Above ₹1.25 Lakh Exemption
Ms. Leena earned ₹2 lakh LTCG on shares sold on 1 Aug 2024
Exemption: ₹1.25 lakh → Taxable: ₹75,000
Tax @12.5% = ₹9,375
Example 6: Real Estate Sale With and Without Indexation
Purchase (2004): ₹12 lakh | Sale (Oct 2025): ₹60 lakh
Option 1 (Indexed): Indexed Cost = ₹39.77L → LTCG = ₹20.23L → Tax @20% = ₹4.05L
Option 2 (Flat): Gain = ₹48L → Tax @12.5% = ₹6L
Choose Lower Tax: ₹4.05 lakh
Example 7: Short-Term Gain on Land (Sold Within 24 Months)
Bought: May 2023 for ₹15L | Sold: May 2025 for ₹25L
Holding: 2 years → STCG
Gain: ₹10L → Taxed as per slab (e.g., 30%) = ₹3L
Example 8: STCG on Equity Mutual Funds
Bought: Jan 2025 for ₹2L | Sold: June 2025 for ₹2.5L
STCG = ₹50,000 → Tax @20% = ₹10,000
Example 9: NRI Sells Shares After 23 July
Bought: $10,000 (2020) | Sold: $12,000 (2025)
Gain: $2,000 = ₹1.6 lakh
Exemption: ₹1.25 lakh → Taxable: ₹35,000
Tax @12.5% = ₹4,375
🧾 Mixed Period Capital Gains (Before and After 23 July)
Example 10: Gains Across Both Periods
Mr. Arvind sold shares on:
1st June 2024 → LTCG = ₹80,000
30th July 2024 → LTCG = ₹80,000
Total LTCG = ₹1.60 lakh
Exemption of ₹1.25 lakh applies for entire FY 2024–25
Taxable LTCG = ₹35,000 → Tax @12.5% = ₹4,375
Note: Exemption is applied first to the earliest gains. In this case, ₹80,000 from 1st June is exempt first, followed by ₹45,000 from 30th July (₹1.25L - ₹80K = ₹45K exemption left).
Example 11: Applying Exemption to Earliest Gains
Mr. Rahul sold shares:
Before 23 July: ₹90,000 LTCG
After 23 July: ₹80,000 LTCG
Total LTCG = ₹1.70 lakh
Treatment:
Apply ₹1.25 lakh exemption to earliest gains (₹90K first)
Remaining exemption = ₹35K → Applied to post-23 July gains
Taxable Post-23 July LTCG = ₹80K - ₹35K = ₹45K
Tax @12.5% = ₹5,625
🧠 Capital Gains Tax Planning Tips
Split gains across years to stay below ₹1.25 lakh exemption.
Use indexation for property and non-equity asset gains.
Claim Sec 54/54F exemptions for residential reinvestments.
Invest under Sec 54EC in NHAI/REC bonds within 6 months to defer tax.
NRI clients should evaluate DTAA benefits and applicable TDS rates.
💡 Example: Mr. Kiran earns ₹30 lakh from land sale in Aug 2024. He invests ₹30 lakh in 54EC bonds in Oct 2024 → Tax Payable: ₹0.
📋 Capital Gains Tax Summary Table
Asset Type | Holding Period | LTCG Rate | STCG Rate | Exemption Limit | Indexation Available |
Listed Shares | >12 months | 12.5% (post) / 10% (pre) | 20% (post) / 15% (pre) | ₹1.25 lakh/year | ❌ |
Unlisted Shares | >24 months | 12.5% | Slab rate | ❌ | ❌ |
Immovable Property | >24 months | 20% (with indexation) / 12.5% | Slab rate | ❌ | ✅ |
Equity Mutual Funds | >12 months | 12.5% | 20% | ₹1.25 lakh/year | ❌ |
📝 Conclusion
The capital gains tax reforms from 23rd July 2024 simplify computation and bring uniformity across investments. From equity to property to NRIs, these examples and strategies help clients make informed, tax-efficient decisions.
Need help calculating or planning your capital gains tax? Contact us for a customised consultation.
Tags: Capital Gains, Income Tax India 2024, LTCG, STCG, Mutual Fund Tax, Real Estate Taxation, NRI Tax Rules