LTCG vs STCG — Holding Periods & Rates for Every Asset Class

Three extra days of holding can be the difference between paying 20% and 12.5% tax on the same gain. Getting the holding period right is the single most consequential calculation in capital gains tax. Here’s the full reference.

Holding Period Table

Asset

Short-Term If Held

Long-Term If Held

Listed equity shares

≤ 12 months

> 12 months

Equity mutual funds

≤ 12 months

> 12 months

Units of a business trust (REIT/InvIT)

≤ 12 months

> 12 months

Unlisted shares

≤ 24 months

> 24 months

Immovable property (land/building)

≤ 24 months

> 24 months

Gold, jewellery

≤ 24 months

> 24 months

Debt mutual funds (bought before 1 Apr 2023)

≤ 24 months

> 24 months

Debt mutual funds (bought on/after 1 Apr 2023)

Always short-term, regardless of holding period

—

Virtual Digital Assets (crypto/NFT)

Not applicable — flat 30% tax regardless of period

—

Tax Rate Table

Gain Category

Rate

Exemption

STCG — equity (STT paid)

20%

None

STCG — other assets

Slab rate

None

LTCG — listed equity/equity funds

12.5%

₹1.25 lakh/year

LTCG — property, gold, unlisted shares

12.5% (no indexation) or 20% (with indexation, pre-22 July 2024 purchases only)

None

VDA/crypto

30% flat

None

Why the STT Condition Matters

The preferential 20%/12.5% rates on equity apply only where Securities Transaction Tax (STT) has been paid on the transaction. If STT wasn’t paid (e.g., certain off-market or unlisted transfers), STCG reverts to slab rates and LTCG loses the ₹1.25 lakh exemption (though it still gets the 12.5% rate).

The IFSC Exception

Transactions on a recognised stock exchange in an International Financial Services Centre (like NSE IFSC at GIFT City), where consideration is paid in foreign currency, get the beneficial capital gains rates without needing to pay STT — a specific carve-out for foreign investors trading through GIFT City.

Rule 6: How Holding Period Is Actually Computed

Special situations are governed by Rule 6 of the Income-tax Rules, 2026:

•             Bonds/debentures converted to shares: the pre-conversion holding period counts toward the total.

•             Assets declared under the Income Declaration Scheme, 2016: immovable property counts from the registered deed date; other assets count from 1 June 2016.

Frequently Asked Challenges

Q1. I sold shares exactly 12 months after purchase — is that long-term or short-term? Generally, “more than 12 months” is required for long-term status — exactly 12 months typically falls just short of the long-term threshold, so check the exact date of purchase and sale carefully.

Q2. Do I get the ₹1.25 lakh exemption on debt mutual funds too? No — the ₹1.25 lakh exemption applies specifically to listed equity shares, equity mutual funds, and business trust units under the equity LTCG provision, not to debt funds or other asset classes.

Q3. Why is my debt mutual fund taxed at slab rate even though I held it for 3 years? If it was purchased on or after 1st April 2023, debt mutual funds lost their long-term benefit entirely — all gains are treated as short-term and added to your slab income, regardless of how long you hold them.

Rates and holding periods reflect Tax Year 2026-27, continuing the Finance Act 2024 framework.