Income tax on long term capital gain on mutual funds/shares

Even if it will not be taxed, but if it is equity base MF transaction, declare it under Schedule 112A. Utility will itself take care of exemption.

LTCG on equity mutual funds and listed shares is now taxed at 12.5% (no indexation benefit) for gains above Rs. 1.25 lakh in a financial year.

The key changes from the July 2024 Budget:
- Gains from equity MFs and listed shares held for more than 12 months: LTCG at 12.5%
- Annual exemption: Rs. 1.25 lakh (up from Rs. 1 lakh)
- Grandfathering clause: cost of acquisition for assets bought before January 31, 2018 is the higher of actual cost or the closing price on January 31, 2018

For debt mutual funds (not equity-oriented), the holding period for LTCG classification is 24 months (not 12), and gains are taxed at your slab rate with indexation available if units were bought before April 1, 2023.

You report this in Schedule CG of the relevant ITR form (ITR-2 for most salaried individuals with capital gains, ITR-3 if you also have business income).

For the complete breakdown of mutual fund tax rates, exemptions, and how to report in ITR, this [mutual fund taxation guide for AY 2026-27](https://taxgarden.in/blog/mutual-fund-taxation-india-ay-2026-27) covers equity, debt, and hybrid categories.

Long-Term Capital Gain (LTCG) is the gain from the sale of shares or equity mutual funds that have been held for over 12 months. LTCG is only taxable when the investment is sold/redeemed, not when it is held. 

STCG in listed equity shares and equity oriented mutual funds, where the investment amount is more than ₹1.25 lakh, in a financial year is taxable at 12.5% (as per applicable conditions, including payment of STT). The exemption limit is ₹1.25 lakh. 

Example:

Purchase Value: ₹5,00,000
 Sale Value: ₹8,00,000
 LTCG: ₹3,00,000
 Less Exemption: ₹1,25,000
 Taxable LTCG: ₹1,75,000
Tax @ 12.5% = ₹21,875 (plus applicable cess). ([Etds][2])

 Any long-term capital losses incurred in previous years that have not yet been used can be carried forward and deducted from the existing LTCG, leading to tax savings. ([CAclubindia][1])

 If you need an exact sum, please communicate:

 The first type is about the type of investment (shares/equity or debt MF),
 2. Date and price of buying,
 The 3rd one is the "sale date" and the "sale value".
 4. Capital losses from previous years that have been carried forward.