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Tax Planning — Advanced
Holding equity for 12+ months qualifies for LTCG tax at 12.5%, which is lower than STCG at 20%.
Concept
Holding equity for 12+ months qualifies for LTCG tax at 12.5%, which is lower than STCG at 20%.
Capital gains tax applies when you sell an asset for profit. For equity/mutual funds: STCG (held <12 months) is taxed at 20%, LTCG (held ≥12 months) at 12.5% above ₹1.25 lakh exemption. For debt/property, holding periods and rates differ.
हिंदी मेंAsset profit पर बेचने पर capital gains tax लगता है। Equity/mutual funds: STCG (<12 months) 20%, LTCG (≥12 months) 12.5% — ₹1.25 lakh तक exempt।
Example
See it in action
You invest ₹5L in an equity fund. After 15 months, it's worth ₹7L — ₹2L profit. LTCG = ₹2L − ₹1.25L exemption = ₹75K taxable at 12.5% = ₹9,375 tax. If sold before 12 months, STCG = ₹2L × 20% = ₹40,000.
हिंदी में₹5L equity fund में invest किया, 15 months बाद ₹7L — ₹2L profit। LTCG: ₹75K taxable × 12.5% = ₹9,375। 12 months से पहले बेचा तो STCG: ₹2L × 20% = ₹40,000।
Key takeaway
Remember this
Patience pays — holding equity for 12+ months can cut your tax bill by more than half.
Not all investment profits are taxed the same — the tax rate depends on how long you held the asset.
हिंदी मेंPatience pays — equity 12+ months hold करने से tax bill आधे से भी कम हो सकता है।
Learn Tax Planning by doing
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