Capital Gain Optimizer India — Minimise Tax on Equity & Property Gains FY 2025-26
The Capital Gain Optimizer helps you time asset sales to minimise tax: choosing between STCG and LTCG, utilising the ₹1.25L annual equity exemption, offsetting gains with losses, and deciding between selling before or after March 31. Optimal strategy can save ₹20,000–₹2 lakh or more annually.
₹1.25L
Annual LTCG equity exemption — harvest every year to reset cost basis
12.5%
LTCG on equity held >1 year vs 20% STCG for <1 year
8 years
Period to carry forward capital losses for future set-off
Sell after 1 yr
Waiting 365+ days converts 20% STCG to 12.5% LTCG on equity
📐 Optimization Formula
Tax Saved = (STCG Rate − LTCG Rate) × Gain = (20% − 12.5%) × Gain = 7.5% × Gain
By waiting to cross the 1-year holding period for equity, you save 7.5% on each rupee of gain.
Exemption Harvesting: If LTCG < ₹1.25L, sell and rebuy to reset cost basis tax-free every year.
Example: ₹10L gain in equity held 11 months. Wait 1 more month → STCG tax saved = 7.5% × ₹10L = ₹75,000. Worth waiting for?
🛠️ How to Use
- Step 1: Enter your asset details: purchase date, purchase price, current value.
- Step 2: Select asset type and check if it crosses the long-term threshold (1 year for equity, 2 years for property/gold).
- Step 3: Enter any available capital losses to offset against gains.
- Step 4: The optimizer shows: tax if sold today, tax if sold after holding threshold, and tax saved by waiting.
- Step 5: Annual strategy: harvest up to ₹1.25L LTCG every April tax-free by selling and rebuying equity holdings.
💡 Pro Tips
✓ March vs April timing: selling in March reduces your flexibility — large gains in March exhaust annual LTCG exemption. April gives a fresh ₹1.25L exemption.
✓ Book losses before March 31 — don't let loss-making investments sit past financial year end without harvesting.
✓ Set-off strategy: use STCL against STCG (20%) first — saves more tax per rupee of loss vs setting off against LTCG (12.5%).
✓ For NRIs: capital gains TDS rates differ — 20% for LTCG, 30% for STCG on equity. File ITR for refund if actual tax is lower.
❓ FAQs
How do I minimise capital gains tax on stocks legally? +
1) Hold >1 year for LTCG rate (12.5% vs 20% STCG). 2) Harvest ₹1.25L LTCG tax-free every year. 3) Harvest losses to offset gains. 4) Time sales across financial years. 5) Gift to family members in lower tax brackets (though clubbing provisions may apply).
What is LTCG exemption harvesting and is it legal? +
Fully legal. Sell equity with LTCG of ₹1.25L each year and immediately rebuy — this resets cost basis tax-free. Over 10 years of ₹1.25L annual harvest, you save ₹18,750/year × 10 = ₹1.88L in future LTCG taxes.
Can I offset real estate capital loss against equity gains? +
Real estate LTCL can be set off against equity LTCG (both are LTCG). However, real estate LTCL cannot offset equity STCG. Cross-asset loss harvesting works only within the same capital gain category.
What if I inherit shares — what is the cost basis? +
For inherited shares, cost to previous owner (and their acquisition date) is considered for capital gains calculation. For shares received before January 31, 2018, special grandfathering provisions apply — cost basis is Fair Market Value on Jan 31, 2018 or original cost, whichever is higher.
What is the tax on LTCG if sold through off-market transaction? +
Off-market equity sales are taxed differently — gains are NOT eligible for the 12.5% LTCG concessional rate. They are taxed at slab rate as normal income. Always sell through recognised stock exchanges to benefit from 12.5% LTCG rate.