Capital Gains Tax
In India, capital gains—profits from selling assets—are taxed based on asset type (equity or debt) and holding period. For equity, Short-Term Capital Gains (STCG), held less than 1 year, are taxed at 20%, while Long-Term Capital Gains (LTCG), held over 1 year, are taxed at 12.50%. For debt, STCG, held under 3 years, follow the individual’s income tax slab, whereas LTCG, held over 3 years, are taxed at 20%. These rates ensure taxation aligns with investment duration and asset nature, encouraging longer-term investments while generating revenue for the government from market transactions.
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