Lesson 3 of 3 · 8 min
The line dated 23 July 2024
Indexation is gone, and the rules that applied to your sale depend on which side of one date it happened. How to work out which set you are reading.
The third change came with the second. The long-term rate fell to 12.5%, and at the same moment indexation was removed. Those two are one decision, not two, and reading either on its own gives you the wrong picture of what happened.
So the honest description is a trade: a lower rate applied to a bigger number. Whether that leaves any particular person better or worse off depends on how long they held the asset and how much inflation ran in that time. It is arithmetic with two inputs, and no general answer — which is exactly why nobody should tell you which way it went for you.
What applies to a sale, and when
Up to 22 July 2024
The old rules
Three holding periods. 10% on long-term listed equity above ₹1 lakh, 20% with indexation on most other long-term gains, 15% on short-term listed equity.
23 July 2024 onwards
The new rules
Two holding periods. 12.5% long-term across almost everything, exemption raised to ₹1.25 lakh, 20% short-term on listed equity, indexation removed.
1 April 2026 onwards
New Act, same rules
The Income-tax Act 2025 replaced the 1961 Act and renumbered the provisions. The substance of the capital-gains rules above did not change with it.
How do I know which rules my sale falls under?
KabirTara
Kabirasking
I sold something in 2024 but I cannot remember the month. How much does that matter?
Taraexplaining
For that year, more than anything else. A sale on 22 July and a sale on 23 July are read under different rules. The date of transfer is on the contract note or the sale deed, so it is a fact you can look up rather than recall.
Kabirasking
And if an article I am reading does not say which side of the line it is about?
Taraexplaining
Then it is not usable, and that is the most valuable habit this course can leave you with. Check the date on the writing before you rely on the number in it. Anything published before mid-2024 is describing a system that no longer exists.
Put these in order
Put these in the order you would actually do them to work out the tax on one sale.
- Apply the rate for that classification, and any exemption that applies
- Apply the holding-period clock for that class to decide short- or long-term
- Identify the asset class, and whether it is listed
- Find the date of transfer on the contract note or sale deed
Check yourself
1 / 3
Kabir asks
Which date divides the old capital-gains rules from the new ones?
Done reading?
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