Last Updated on August 6, 2024 at 11:13 pm
This article explains how capital gains from different investments will be taxed. These are applicable for redemptions made on or after 23rd July 2024. Indexation benefits are history for all asset classes.
Update: Finance Bil 2024 has been amended. Taxpayers can now choose either 12.5% without indexation or 20% with indexation, whichever is lower for LTCG on property.
| Instrument | New STCG | New LTCG |
| Funds holding 65% or more of domestic equity or equity FOFs* (equity funds) | 20% (<1Y) | 12.5% (>1Y) (first 1.25L is tax free) |
| Funds holding 65% or more of debt and money market instruments or debt FOFs** (debt funds) | Slab rate | Slab rate |
| All other funds and FOFs (other funds) | slab rate (<2Y) | 12.5% (>2Y) |
note: The Rs. 1.25L is the cumulative capital gain across all equity funds.
* equity FOF: A fund of fund will be classified as an equity fund if it invests 90% of its assets in funds that, in turn, invest 90% of its assets in domestic equity (so essentially equity ETFs or index funds).
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** debt FOF: A fund of fund will be classified as an debt fund if it invests a minimum 65% of its assets in funds that, in turn, invest a minimum 65% of its assets in debt and money market instruments
Read more: Budget 2024: How will fund of funds be taxed from July 23rd 2024?
For debt funds: If you have purchased units on or before March 31st 2023, and sold after July 23rd 2024, you will be taxed at 12.5% without indexation if the duration of holding is > 2Y.
If you purchased after March 31st 2023, it will always be at the slab rate
Examples
| Instrument | New STCG | New LTCG |
| Gold ETFs, Silver ETFs | slab rate (<1Y) | 12.5% (>1Y) |
| Gold Funds (fof), Silver Funds (off) | slab rate (<2Y) | 12.5% (>2Y) |
| overseas Funds | slab rate (<2Y) | 12.5% (>2Y) |
| Equity-oriented funds | 20% (<1Y) | 12.5% (>1Y) (first 1.25L is tax free) |
| Arbitrage Fund | 20% (<1Y) | 12.5% (>1Y) (first 1.25L is tax free) |
| Equity Savings Funds | 20% (<1Y) | 12.5% (>1Y) (first 1.25L is tax free) |
| Aggressive Hybrid | 20% (<1Y) | 12.5% (>1Y) (first 1.25L is tax free) |
| Balanced hybrid | slab rate (<2Y) | 12.5% (>2Y) |
| Dynamic Asset Allocation | Depends on fund mandate | Depends on fund mandate |
| Conservative hybrid | Slab rate | Slab rate |
| Debt-oriented funds (liquid, money market, gilt, corporate bond and others) | Slab rate | Slab rate |
Other asset classes
| Instrument | New STCG | New LTCG |
| Sov Gold Bonds (tax-free on maturity) When sold mid-term: | Slab rate (<1Y) | 12.5% (>1Y) |
| Listed Bonds | Slab Rate (<1Y) | 12.5% (>1Y) |
| REITs/InVITs | 20% (<1Y) | 12.5% (>1Y) |
| Real Estate | slab rate (<2Y) | 12.5% (>2Y) |
| Physical Gold | slab rate (<2Y) | 12.5% (>2Y) |
| Unlisted stocks | slab rate (<2Y) | 12.5% (>2Y) |
| Overseas equity/bonds | slab rate (<2Y) | 12.5% (>2Y) |
Read more from the freefincal budget 2024 coverage
1. Confused about mutual fund taxation? Here is an easy-to-understand guide. Budget 2024: Big change in mutual fund taxation rules
2. Budget 2024: New Tax Regime vs Old Tax Regime Calculator: Check which is better
3. Budget 2024: Real Estate Taxation Change Can Significantly Increase Tax Burden!
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