Work out LTCG tax on shares and equity mutual funds under Section 112A — 12.5% rate, ₹1.25 lakh exemption, and grandfathering, calculated automatically.
This LTCG calculator section 112A tool works out the tax you owe on long-term capital gains from listed equity shares and equity-oriented mutual funds. It's built for retail investors, salaried employees with a demat account, traders who also hold long-term positions, and CAs preparing Schedule 112A entries for client returns.
You enter your sale value, cost of acquisition, and sale date. The calculator applies the correct rate and exemption automatically, so you don't have to remember which slab applies to which financial year.
For transfers made on or after 23 July 2024, per Section 112A as amended by the Finance (No. 2) Act, 2024:
Taxable LTCG = Total LTCG − ₹1,25,000 (annual exemption)
Tax = Taxable LTCG × 12.5%
Total Payable = Tax + Surcharge (if applicable) + 4% Health & Education Cess
For sales made before 23 July 2024, the old formula applies: exemption of ₹1,00,000 and a 10% rate. You can check the full text of Section 112A on the Income Tax Department site if you want to read the bare law yourself.
If you bought your shares or units before 31 January 2018, the grandfathering rule kicks in. Your cost of acquisition becomes the higher of the actual cost, or the lower of the fair market value on 31 January 2018 and the actual sale price. This stops you from paying tax on gains that built up before Section 112A even existed.
Priya bought 500 shares of an FMCG company in March 2022 for ₹4,00,000. She sold all of them in June 2026 for ₹7,50,000. She has no other capital gains this year, and her salary income is ₹9,00,000.
That's it. No indexation, no slab confusion. Just the flat rate above the exemption.
The Union Budget 2025-26 made no change to the LTCG rate or exemption limit under Section 112A. The 12.5% rate and ₹1.25 lakh annual exemption, introduced through the Finance (No. 2) Act, 2024 with effect from 23 July 2024, continue to apply for FY 2025-26 (AY 2026-27).
There's a bigger structural change to flag, though. From 1 April 2026, the Income-tax Act, 2025 has replaced the 1961 Act. Section 112A now corresponds to Section 198 of the new Act, with the "Financial Year / Assessment Year" split replaced by a single "Tax Year" concept. The rate, the ₹1.25 lakh exemption, and the grandfathering rule are all carried over unchanged. If you're filing for Tax Year 2026-27 onward, you'll see this transaction referenced as Section 198; for anything up to FY 2025-26, Section 112A still applies.
One more practical point: if you sold shares or units in two tranches, one before 23 July 2024 and one after, split your gains and apply both formulas separately in the same year's return. The ₹1.25 lakh exemption is available once per financial year in total, not once per formula period.
Yes, gains up to ₹1.25 lakh in a financial year from listed equity shares and equity mutual funds are exempt. Anything above that is taxed at 12.5% for sales on or after 23 July 2024. This exemption applies once per year across all your equity LTCG combined, not per transaction.
Yes. Short-term capital loss can be set off against both short-term and long-term gains, including LTCG under 112A. Long-term capital loss, though, can only be set off against long-term gains, never against short-term gains.
Since you often can't predict LTCG in advance, the law doesn't penalise you for missing an advance tax instalment on it, as long as you pay the tax by the next instalment date after the gain arises. You still need to include it in your total tax liability for the year.
Holding period is calculated from the day after purchase to the day of sale, inclusive. If your holding works out to exactly 12 months or less, it's short-term and taxed under Section 111A, not 112A. Check your contract note dates carefully before assuming long-term status.
No. Section 112A only covers listed equity shares, units of equity-oriented mutual funds, and units of business trusts where STT has been paid. Unlisted shares fall under Section 112. Debt-oriented mutual funds fall under Section 50AA and are taxed at your slab rate regardless of holding period.
You can book gains in smaller tranches across financial years to use the ₹1.25 lakh exemption repeatedly, provided you're comfortable re-entering the same position. Reinvesting through Section 54F-type exemptions doesn't apply to listed equity, so this is really your main lever.
It's only to check whether surcharge applies. Surcharge kicks in once your total income including LTCG crosses ₹50 lakh, at 10%, and rises to 15% above ₹1 crore. For income covered under Sections 111A, 112 and 112A, the surcharge rate is capped at 15% even at very high income levels, unlike ordinary income where it can go up to 37%.
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