What is long-term capital gain?
In one sentence
The profit on selling a capital asset held for longer than the period the Act sets: 12 months for listed securities and equity fund units, 24 months for most others.
An everyday analogy
Like a loyalty discount: keep the asset long enough and a different rate applies.
How it flows
A real example
₹5 lakh of long-term gains on listed shares: ₹1,25,000 allowance, tax ₹46,875 plus ₹1,875 cess = ₹48,750.
Why it matters
The holding period can change the rate from your slab to 12.5%.
How it differs
A short-term gain is taxed at 20% (listed equity) or your slab rate.
What the law says
Section 198(2)
(2) The tax payable by the assessee on the total income referred to in sub-section (1) shall be the aggregate of— (a) income-tax calculated on such long-term capital gains exceeding ₹125000 at the rate of 12.5%; and (b) income-tax payable on the total income as reduced by long-term capital gains referred to in sub-section (1) as if the total income so reduced were the total income of the assessee.
Income-tax Act, 2025 as amended by the Finance Act, 2026 · text as notified, amendment footnote numbers omitted · checked 24 October 2026 · Official text
Show answer
No, once a year on the total.
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Meet the expert
CS Prashant Kumar
Company Secretary & Compliance Officer
Global Horizons Capital Advisors (IFSC) Private Limited — an IFSCA-licensed investment banker
Published in The Chartered Accountant (Jun 2025, Jan 2025, Mar 2024) and Chartered Secretary (Aug 2023)
Prashant Kumar is a seasoned Company Secretary and corporate governance strategist with more than 13 years of experience advising large corporates, promoter-led groups and global businesses on compliance, regulatory risk and board governance. In GIFT IFSC, the IFSCA regime is his day job rather than a research topic.