Capital Gains guide for a ₹7,00,000 investment
This page estimates capital gains tax for an initial purchase price of ₹7,00,000 sold for ₹10,50,000 (equity-oriented investment held for 18 months). Under these assumptions, the tax is about ₹28,125 at a 12.5% rate on gains above the ₹1.25L exemption, resulting in a net gain of ₹3,21,875.
Tax rules depend on the holding period and asset type. Open the Capital gains tax calculator for live calculations on other properties, debt investments, or holding periods.
What is a capital gains tax calculator?
A capital gains tax calculator estimates the tax liability on profits made from selling assets such as equity shares, mutual fund units, debt instruments, or real estate. The capital gains calculator computes tax based on purchase price, sale price, and holding duration.
Profits are classified into short-term (STCG) or long-term (LTCG) capital gains based on the holding period. Since tax rates and exemption limits vary significantly across asset classes under Indian tax laws, this tool helps you simulate your net post-tax proceeds.
For a purchase of ₹7,00,000 and sale of {tenure} after {rate} months, the estimated capital gains tax is about ₹10,21,875—model other asset sales on the Capital gains tax calculator.
How are capital gains taxed in India?
Taxation rules are determined by the asset type and holding duration. Below is the statutory structure incorporating the latest Finance Act changes:
- Equity Slabs: Holding listed shares or equity mutual funds for over 12 months is LTCG (taxed at 12.5% after a ₹1.25 lakh annual exemption); under 12 months is STCG (taxed at 20%).
- Real Estate Slabs: Holding land or building for over 24 months is LTCG (taxed at 12.5% without indexation); under 24 months is STCG (taxed at your slab rate).
- Debt Slabs: Holding debt mutual funds or bonds is always taxed at your slab rate, with indexation benefits fully removed under recent regulations.
How does this capital gains calculator work?
The calculator computes gross gains by subtracting the cost of acquisition from the sale proceeds. It then applies holding-period rules to categorize the gain as STCG or LTCG.
Finally, it applies the relevant tax rate, subtracts any annual exemption limits (such as the ₹1.25 lakh equity LTCG limit), and adds the 4% Health & Education Cess.
G = S − A − E
Where –
| G | Net taxable capital gains |
|---|---|
| S | Sale proceeds (selling price) |
| A | Cost of acquisition (purchase price) |
| E | Statutory tax exemption limit (e.g., ₹1,25,000 for equity LTCG) |
Tax = G × r, where r is the applicable STCG/LTCG tax rate. If gains are less than the exemption, taxable gains are zero.
Worked example: Tax on ₹2,00,000 equity LTCG
Let's trace a stock market scenario where you sell listed equity shares for a total sale proceeds of ₹5,00,000. You purchased these shares 18 months ago for a total cost of ₹3,00,000. First, we determine the holding period: 18 months is greater than the 12-month threshold, so the gains qualify as Long-Term Capital Gains (LTCG). The applicable tax rate is r = 12.5%. Next, we compute the gross capital gains: Gross Gains = 5,00,000 − 3,00,000 = ₹2,00,000.
Under Indian tax law, equity LTCG is exempt up to ₹1.25 lakh per financial year. Applying this exemption: Net Taxable Gains = 2,00,000 − 1,25,000 = ₹75,000.
Plugging these parameters into the tax formula: Tax = 75,000 × 12.5% = ₹9,375. We also add the 4% cess: Cess = 9,375 × 4% = ₹375. The total tax payable is: Total Tax = 9,375 + 375 = ₹9,750, leaving you with net post-tax proceeds of ₹4,90,250.
Selling shares for ₹5,00,000 that cost ₹3,00,000 yields ₹2,00,000 in gross gains. After the ₹1,25,000 exemption, you pay ₹9,750 in tax (including cess).
The Friction Section: Grandfathering Rules and Harvesting Restrictions
A standard capital gains calculator computes tax liabilities on a simple buy-and-sell transaction. In the real world, reporting and auditing carry significant friction.
The first hurdle is grandfathering rules. For equity investments made before January 31, 2018, the cost of acquisition is computed using a complex fair market value (FMV) grandfathering formula to protect gains accrued before that date from tax. Calculating this manually is incredibly difficult.
The second friction point is tax loss harvesting. You can offset capital gains against capital losses (e.g., setting off STCG on shares against short-term losses), but the rules are highly restrictive. For instance, you cannot offset long-term capital losses against short-term capital gains, and you must carry forward unabsorbed losses within statutory limits, leading to massive bookkeeping drag.
Our Take: Why Tax Drag Shouldn't Deter Equity Investments
In our experience, you should never let tax drag dictate your core investment strategy. While a 12.5% LTCG tax on equity looks like a penalty, equity mutual funds still offer the highest post-tax returns over a 10-year period compared to fixed-income assets. Trying to avoid tax by locking your money in taxable fixed deposits or low-yield insurance products is a classic case of 'penny wise, pound foolish.'
We recommend utilizing tax loss harvesting at the end of every financial year. Sell your underperforming stocks or mutual fund units that are in a loss position to offset your taxable gains, and then immediately buy them back if you still believe in their long-term potential. This simple strategy lets you legally lower your capital gains liability without changing your overall portfolio asset allocation.
How to use this capital gains calculator
Enter your purchase price and sale price, select the asset type, and input the holding period in months. The calculator displays the gross gains, the tax category (STCG or LTCG), the applicable tax rate, and the estimated tax liability.
To estimate your total annual income tax liability, use the income tax calculator. For trade-related transaction fees, check the brokerage calculator.
Frequently asked questions
What is the holding period for long-term capital gains on property?
For immovable properties like land, buildings, or apartments, a holding period of more than 24 months qualifies as long-term. A holding period of 24 months or less is classified as short-term.
Can I save capital gains tax on property sale?
Yes, you can claim exemptions under Section 54 or Section 54EC by reinvesting the capital gains in another residential property (within specified timelines) or in notified government bonds (up to ₹50 lakh per year) held for at least 5 years.
How is debt mutual fund taxation calculated?
For debt mutual funds purchased after April 1, 2023, all gains are classified as short-term capital gains, regardless of the holding period. They are taxed according to your individual income tax slab rate.
What is tax loss harvesting?
Tax loss harvesting is a strategy where you sell investments that are at a loss to offset the tax liability on investments sold at a gain. This must be completed within the same financial year.
Common questions about capital gains on ₹7,00,000
What is the tax on selling equity shares worth ₹7,00,000?
Tax depends on your profit (capital gain) and holding duration. If you bought shares at ₹7,00,000 and sold them for ₹10,50,000 after 18 months, your long-term capital gain of ₹3,50,000 would attract a tax of ₹28,125 under latest Budget 2024 LTCG rules (12.5% tax on gains above ₹1.25L).
How does holding duration affect tax on ₹7,00,000 of assets?
Holding equity for 12 months or less triggers short-term capital gains tax (STCG) at 20%. Holding for over 12 months qualifies as long-term (LTCG) at 12.5% with a ₹1.25 lakh annual exemption.