Tax
Rates and rules for FY 2026-27. General information rather than tax advice, and worth confirming with a professional once the amounts are meaningful.
What is the capital gains tax on shares in India?
For FY 2026-27, listed shares and equity mutual funds sold within 12 months are taxed at 20%. Sold after 12 months, gains are taxed at 12.5% on the amount above Rs 1.25 lakh for the financial year. Budget 2026 made no change to these rates.
Is the Rs 1.25 lakh exemption per fund or per year?
Per year, and combined. It covers all your long term equity gains together, from mutual funds and directly held shares. It is not available separately for each holding and it does not carry forward if unused.
How are debt mutual funds taxed now?
Units bought on or after 1 April 2023 are taxed at your income tax slab rate no matter how long you hold them, with no indexation. Units bought before that date keep the older treatment, taxed at 12.5% if held beyond 24 months.
Is Section 80C still valid?
The benefit continues but the number changed. Under the Income-tax Act 2025, effective 1 April 2026, Section 80C became Section 123 with eligible investments listed in Schedule XV, and the Rs 1.5 lakh limit is unchanged. Returns filed in July 2026 for FY 2025-26 still use the old numbering.
Are tax saving investments still useful?
Only if you file under the old tax regime. The new regime is the default and removes almost all investment deductions, so ELSS and similar options give no tax benefit there. The one large exception is your employer contribution to NPS, which is deductible under both regimes.
How is a SIP taxed?
Each instalment is treated as a separate purchase with its own holding period, and redemptions follow first in, first out. So withdrawing after four years produces mostly long term gains, plus short term gains at 20% on everything bought in the last twelve months.
How are dividends taxed in India?
Since April 2020, dividends are added to your total income and taxed at your slab rate, with TDS deducted once dividend income crosses the applicable threshold. This is less favourable than long term capital gains on equity for higher earners.
How is intraday trading taxed?
Intraday equity trading is treated as speculative business income rather than capital gains. Profits are added to your total income and taxed at your slab rate, and speculative losses can only be set off against speculative gains, carried forward for four years.
How are gold ETFs taxed?
Listed gold ETF units bought on or after 1 April 2025 qualify as long term after 12 months and are taxed at 12.5%. Gold mutual funds keep the 24 month threshold because their units are not listed. Neither receives the Rs 1.25 lakh exemption available to equity.
What is the TCS on investing in US stocks?
Investment remittances attract 20% TCS on the amount above Rs 10 lakh in a financial year, aggregated across all your remittances. TCS is not an extra tax, it is adjustable against your income tax liability when you file your return.
How can I legally reduce tax on my investments?
Use the Rs 1.25 lakh long term exemption each year since it does not carry forward, hold past twelve months where possible, set off realised losses against gains and carry forward the rest by filing on time, choose growth over IDCW in funds, and rebalance using new money rather than selling.
Do I pay tax if I have not sold anything?
Not on capital gains, which apply only when you sell and realise a gain. However dividends and interest received during the year are added to your income and taxed at your slab rate even if you never sell the underlying investment.
Lessons behind these answers
Tax on investments
STCG, LTCG and the new Income-tax Act, 2025, in plain language.
Tax saving investments
Section 123, formerly 80C, and what actually qualifies.
Dividend investing
Owning companies that pay part of their profit out to shareholders.
Intraday trading
Buying and selling the same day. What the SEBI data actually shows.
Gold investing
Physical, ETF, sovereign bonds. What changed for SGBs in 2026.
US stocks from India
How it works, what it costs, and the tax and LRS rules.