Understanding Capital Gains Taxation Across Structures
Taxation is one of the most overlooked yet impactful aspects of long-term investing. With the revised capital gains tax structure post July 23, 2024, it’s essential to understand how different asset classes — from equities to real estate — are taxed. At Riser Wealth, we believe smart capital allocation is incomplete without tax-aware structuring. Below, we break it down clearly:
Current Capital Gains Tax Structure (Post July 23, 2024)
| Asset Class | Short-Term CG Rate | Long-Term CG Rate | Holding Period (LT) |
|---|---|---|---|
| Equity Shares, Equity MFs, Equity FOFs (>90% equity) | 20% | 12.5% | 12 months |
| Listed REITs / InVITs | 20% | 12.5% | 12 months |
| Listed Bonds (ex-MLDs), Gold/Silver/International ETFs | Slab Rate | 12.5% | 12 months |
| Overseas Stocks | 20% | 12.5% | 24 months |
| Other MF (non-equity), Overseas Funds/Bonds, Physical Gold/Art/Unlisted Assets | Slab Rate | 12.5% | 24 months |
| Debt MF (acquired before 1-Apr-2023) | Slab Rate | 12.5% | 24 months |
| Debt MF (post-Apr-2023), MLDs, Unlisted Bonds | Slab Rate | Slab Rate | NA |
Key Observations (Post-2024 Framework)
- Most debt-linked instruments (excluding listed bonds) are taxed at slab rate with no long-term benefit.
- 12.5% LTCG rate applies across most assets — listed or unlisted — once the holding period threshold is met.
- Equity instruments retain a ₹1.25L annual LTCG exemption.
- Real estate acquired before July 23, 2024 allows a choice:
- LTCG at 20% with indexation, or
- LTCG at 12.5% without indexation
| Asset Type | STCG Rate | LTCG Rate | LT Holding Period | Indexation |
|---|---|---|---|---|
| Equity Shares / MFs | 15% | 10% (exempt up to ₹1L) | 1 year | No |
| Non-Equity MFs | Slab Rate | Slab Rate | NA | NA |
| Unlisted Shares / REITs / Bonds | Slab Rate | 20% | 2–3 years | Yes |
| Listed Bonds | Slab Rate | 10% | 1 year | No |
| Real Estate | Slab Rate | 20% | 2 years | Yes |
| Gold (Physical) | Slab Rate | 20% | 3 years | Yes |
| Sovereign Gold Bonds | Slab Rate | Tax-free if held 8 years | 5 years | Yes |
| Overseas Equity | Slab Rate | 20% | 2 years | Yes |
Additional Notes
- Specified Debt MFs: MF schemes with ≥65% in SEBI-regulated debt and money market instruments.
- Equity MFs: MF schemes with ≥65% in Indian equities.
- International ETFs/FOFs: Treated as non-equity for tax purposes.
Capital Loss Rules
- Long-Term Capital Loss (LTCL) → Can only offset against LTCG.
- Short-Term Capital Loss (STCL) → Can offset against both STCG and LTCG.
- Loss carry-forward allowed for up to 8 years.
At Riser Wealth, Tax Efficiency is Strategy
We don’t just allocate capital - we allocate it tax-intelligently. Whether optimizing real estate exits, restructuring legacy portfolios, or assessing MLD viability, our approach ensures that returns aren’t diluted by avoidable tax drag.
The new tax regime adds complexity - but also creates opportunity. By aligning holding periods, investment wrappers, and tax brackets, investors can build portfolios that work harder after tax.
Riser Wealth is a research-first wealth management firm helping investors build conviction-led, tax-aware portfolios across asset classes.
