Capital Gains Tax Filing
Sold shares, mutual funds, a flat, a plot or gold during FY 2025-26? The profit is a capital gain, reported in ITR-2 or ITR-3 at the rate that fits each asset. We compute the tax, claim your exemptions and file on the Income Tax e-filing portal.
What it is
A capital gain is the profit on selling a capital asset such as shares, fund units, land, a house or gold. Sale price, minus the cost of buying and improving the asset, minus selling expenses, is the taxable gain. How long you held the asset decides whether it is short-term or long-term.
For FY 2025-26 (AY 2026-27), capital gains are taxed under Sections 45 to 55A of the Income-tax Act, 1961, with special rates in Sections 111A, 112 and 112A. New rates apply to sales on or after 23 July 2024, which covers all of FY 2025-26. From tax year 2026-27, the Income-tax Act, 2025 carries the same headline rates in Sections 196, 197 and 198.
Who it applies to
You sold shares or fund units
Anyone who sold listed shares, mutual funds, ETFs or bonds during the year, even at a loss.
You sold a house, flat or plot
Including inherited or gifted property. Think of a Faridabad family selling a plot their grandfather bought decades ago: his cost and holding period become theirs.
You also run a business
If you also have business or professional income, the capital gains go into ITR-3 along with your business schedules. Intraday and F&O trades count as business income.
Capital gains tax rates for FY 2025-26
| Asset | Long-term after | Short-term gain | Long-term gain |
|---|---|---|---|
| Listed equity shares, equity mutual funds (STT paid) | 12 months | 20% (Section 111A) | 12.5% on gains above ₹1.25 lakh a year (Section 112A) |
| Land and buildings | 24 months | Slab rates | 12.5% without indexation (Section 112) |
| Unlisted shares, gold, other assets | 24 months | Slab rates | 12.5% without indexation |
| Debt mutual funds bought on or after 1 April 2023 | Always short-term | Slab rates (Section 50AA) | Not applicable |
Here is the catch for property. If a resident individual or HUF sells land or a building bought before 23 July 2024, the tax is the lower of two figures: 12.5% without indexation, or 20% with indexation. Non-residents and companies do not get this choice. For a flat held since 2012, the indexed route can come out cheaper, so we run both.
For listed shares and equity funds bought before 1 February 2018, the cost can be stepped up to the market price on 31 January 2018. Surcharge and 4% cess apply on top of all these rates. The Section 87A rebate cannot be used against tax on gains under Sections 111A and 112A.
Why it matters
Match what the department already sees
Brokers, fund registrars and property registrars report your sales, and they appear in your AIS. Leave one out and a notice follows.
Protect your exemptions
Sections 54, 54EC and 54F can bring the tax on a property gain to nil, but only when the reinvestment and the return are on time.
Keep your losses alive
Capital losses carry forward for 8 years, but only if the return for the loss year is filed by the due date.
Exemptions under Sections 54, 54EC and 54F
| Section | What you sell | Where you reinvest | Key limits |
|---|---|---|---|
| 54 | A residential house (long-term) | Another residential house in India | Buy 1 year before or 2 years after the sale, or build within 3 years; exemption capped at ₹10 crore; two houses allowed once in a lifetime if the gain is up to ₹2 crore |
| 54EC | Land or building (long-term) | Specified bonds | Invest within 6 months; up to ₹50 lakh; 5-year lock-in |
| 54F | Any long-term asset other than a house | A residential house in India | Same time limits as Section 54; you must not own more than one house on the date of sale; capped at ₹10 crore |
If you have not bought or built the new house by the return due date, deposit the unused amount in the Capital Gains Account Scheme with a bank before filing. That keeps the exemption alive while the purchase completes. Larger sales are worth discussing before the deed is signed, through our tax planning and consultancy service.
Documents required
For shares and mutual funds
- Capital gains statement from your broker
- Mutual fund statement from CAMS or KFintech
- Purchase records for shares bought before 1 February 2018
For property
- Sale deed and purchase deed
- Bills for improvement or construction
- Brokerage and transfer expenses
- Stamp duty value of the property
- Will or gift deed, if inherited or gifted
For exemptions and filing
- New house purchase deed or builder agreement
- 54EC bond certificate
- Capital Gains Account Scheme passbook
- AIS, PAN and bank details
How it works
Collect every sale from AIS and statements
We match your AIS with broker, fund and property records so no sale is missed.
Mark each gain short-term or long-term
Each sale is marked short-term or long-term by holding period and taxed under the right section.
Work out the cost and claim exemptions
We apply the 31 January 2018 grandfathering for old shares, compare the indexation option for old property and claim Sections 54, 54EC or 54F where they fit.
Set losses against gains
Short-term capital losses can be set off against both short-term and long-term gains. Long-term losses can be set off only against long-term gains.
File ITR-2 or ITR-3
We pay any balance tax, then file ITR-2, or ITR-3 if you have business income, as part of your income tax return.
Timelines
Belated return: 31 December 2026
The due date of 31 July 2026 for ITR-2 has passed. A belated return for FY 2025-26 can still be filed by 31 December 2026, and a revised return by 31 March 2027.
Reinvest within the windows
54EC bonds within 6 months of the sale. A new house within 1 year before or 2 years after the sale, or construction within 3 years.
Deposit unused gains before filing
Money not yet reinvested goes into the Capital Gains Account Scheme before the return due date.
What happens if you miss it
You pay a Section 234F late fee
₹5,000, or ₹1,000 if total income is up to ₹5 lakh, plus 1% a month interest under Section 234A on unpaid tax.
Your capital losses lapse
A belated return cannot carry capital losses forward, so a loss usable for 8 years is gone.
Tax and notices follow you
An updated return (ITR-U) can still be filed up to 48 months from the end of the assessment year, but it costs extra tax.
Frequently asked questions
What is the tax rate on short-term capital gains on shares?
Short-term capital gains on listed equity shares and equity mutual funds are taxed at 20% under Section 111A, for sales on or after 23 July 2024. A gain is short-term if you held the shares for 12 months or less and STT was paid. Surcharge and 4% cess are added. Every FY 2025-26 sale falls under this rate, so the working is simple once we have your broker statement.
How much long-term capital gain on shares is tax-free?
Up to ₹1.25 lakh a year of long-term gains on listed equity shares and equity mutual funds is exempt under Section 112A. Anything above that is taxed at 12.5%, plus surcharge and cess. A gain is long-term when you held the units or shares for more than 12 months. The limit is per person, per year, across all equity sales. Say you redeem equity funds for a flat’s down payment: splitting the sale across March and April can use two years’ limits.
How is the gain on selling a house taxed for FY 2025-26?
Long-term gains on land and buildings are taxed at 12.5% without indexation under Section 112. A property is long-term if held for more than 24 months. If you are a resident individual or HUF and bought the property before 23 July 2024, you pay the lower of 12.5% without indexation and 20% with indexation. Short-term gains are taxed at slab rates. We compute both options and use the lower one.
Which ITR form should I use for capital gains?
Use ITR-2 if you have capital gains and no business or professional income, and ITR-3 if you also run a business or practice. ITR-1 is allowed only if your only gain is long-term under Section 112A of up to ₹1.25 lakh and you have no losses to carry forward. Any short-term gain or property sale takes you out of ITR-1. The wrong form can lead to a defective-return notice, so we check this first.
How can I save tax on the sale of property?
Reinvest the gain under Section 54, 54EC or 54F. Section 54 exempts the gain from a house if you buy another house within 2 years or build one within 3 years. Section 54EC exempts up to ₹50 lakh invested in specified bonds within 6 months. Section 54F covers gains from other assets reinvested in a house. Sections 54 and 54F are capped at ₹10 crore. With the right timing, the tax can come down to nil.
What is the Capital Gains Account Scheme?
It is a special bank deposit that protects your exemption while you finish buying or building a house. If the amount is not reinvested by the return due date, you deposit it in a Capital Gains Account with an authorised bank before filing. You then use the money for the house within the allowed period. If it stays unused, the amount becomes taxable later. Used well, it buys you time without losing the exemption.
Can I set off capital losses against other income?
No. Capital losses can be set off only against capital gains. A short-term loss can reduce both short-term and long-term gains, while a long-term loss can reduce only long-term gains. Unused losses carry forward for 8 years, provided the return for the loss year was filed by the due date. So even a year with only losses is worth filing on time.
How is inherited property taxed when I sell it?
Inheriting property is not taxed; selling it is. The previous owner’s cost and holding period count as yours, so most inherited property is long-term. If the previous owner bought it before 1 April 2001, the fair market value on that date can be taken as cost. You can also claim Sections 54, 54EC or 54F. We work out the numbers from the old documents.
I missed the 31 July deadline. Can I still report my capital gains?
Yes. For FY 2025-26 you can file a belated return by 31 December 2026, with a late fee of ₹5,000, or ₹1,000 if your total income is up to ₹5 lakh. Interest under Section 234A applies on any unpaid tax. Capital losses in a belated return cannot be carried forward. After that, an updated return is possible with extra tax. File sooner rather than later and the cost stays small.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
There is no government fee to file an ITR on time. A belated return attracts a late fee under Section 234F of ₹5,000, or ₹1,000 if total income is up to ₹5 lakh.
Ready to begin?
Send your broker statement or sale deed, and we will file well before 31 December 2026.