Equity Tax Rates in 2025: What You Owe on Stocks?

If you sell stocks, ETFs, or equity mutual funds, your profits are taxed differently based on how long you held them. Hold over 12 months and pay 12.5% on gains above ₹1.25 lakh. Hold less and pay 20% on every rupee of profit.

Here's what happened: Budget 2024 raised LTCG tax on listed equity, ETFs, and equity mutual funds from 10% to 12.5%, effective July 23, 2024, with the annual exemption threshold raised to ₹1.25 lakh.. STCG tax on the same equity assets was revised upward from 15% to 20% — applicable on all gains when the holding period is 12 months or less.. The 12-month holding period rule applies uniformly to direct stocks, equity ETFs, and equity-oriented mutual funds — debt funds and hybrid funds follow different tax rules entirely..

What you should do: Check the purchase date on every equity mutual fund or stock you plan to sell — crossing the 12-month mark before redemption saves you 7.5 percentage points in tax (20% vs 12.5%).. Calculate your LTCG for this financial year before making more redemptions — once you cross ₹1.25 lakh in long-term gains, every additional rupee is taxed, so spread sales across April 1 if possible.. Set off any capital losses from falling stocks or funds against your gains before March 31 — short-term losses can be set off against both STCG and LTCG, reducing your total tax outgo..

You can carry forward capital losses for up to 8 assessment years — file your ITR on time (before the due date) to preserve this right, even if no tax is payable.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.