Capital Gains Calculator – Investment Tax Estimator

Capital gains refer to the profit earned from selling a capital asset (such as stocks, mutual funds, property, gold, etc.) at a price higher than its purchase price. The gain is calculated as the difference between the selling price and the purchase price (cost of acquisition), after adjusting for any expenses related to the purchase or sale.

The classification depends on the holding period of the asset. For equity shares and equity mutual funds, gains are considered long-term if the asset is held for more than 12 months. For real estate and unlisted shares, the threshold is 24 months. For debt mutual funds, gold ETFs, and physical gold, it's 36 months. Short-term capital gains are taxed at higher rates than long-term capital gains.

Indexation is a benefit available for long-term capital gains (except equity) that adjusts the purchase price of an asset for inflation, thereby reducing the taxable capital gain. It uses the Cost Inflation Index (CII) published by the Income Tax Department annually. The indexed cost of acquisition is calculated as: Original Cost × (CII of Sale Year ÷ CII of Purchase Year).

Short-term capital gains on equity are taxed at 15%, while other short-term gains are taxed as per your income tax slab. Long-term capital gains on equity exceeding ₹1 lakh per year are taxed at 10% without indexation. Long-term capital gains on other assets are taxed at 20% with indexation benefit. Additionally, applicable surcharge and health & education cess are levied on the tax amount.

Yes, capital losses can be offset against capital gains in the same financial year. Short-term capital losses can be set off against both short-term and long-term capital gains. However, long-term capital losses can only be set off against long-term capital gains. Any unused capital loss can be carried forward for up to 8 assessment years to be set off against future capital gains.

The cost of acquisition includes the purchase price of the asset plus any expenses directly related to the purchase, such as brokerage, stamp duty, registration fees, legal fees, etc. Similarly, when calculating capital gains, you can deduct expenses related to the transfer of the asset, such as brokerage, commission, legal fees, etc., from the sale proceeds.

Yes, there are several exemptions available under different sections of the Income Tax Act. For example, under Section 54, long-term capital gains from the sale of a residential property can be exempt if invested in another residential property. Similarly, Section 54EC provides exemption if gains are invested in specified bonds, and Section 54F offers exemption on sale of any asset (other than a house) if the proceeds are used to buy a residential property.