If you hold a share and security for a period of over 36 months before you transfer, the investment would be treated as a long-term capital asset. However, equity shares bought on a recognised stock exchange or units purchased, government securities, listed debentures and zero coupon bonds, holding period would be 12 months rather than 36.
In the Union budget of 2018, the long-term capital gains were re-introduced. A new section 112A was introduced to withdraw the exemption u/s 10(38) to tax long-term capital gains on equity share in a company or a unit of an equity-oriented mutual fund. Having said that, long-term capital gains are applicable on listed securities which would exceed Rs 1 lakh and are taxed at 10 percent.
Short-term capital gains would attract a 15 percent tax and for debt funds, both short-term and long-term funds would attract tax. The long-term capital gains on debt funds would be at 20 percent with indexation and 10 percent without indexation. Indexation is the purchase value for inflation which increases the purchase cost and lowers the gain. Indexation is done by multiplying the property’s cost by the Cost of Inflation Index (CII) from the year in which it was sold to dividing it to the CII of the year it was purchased.If you have invested in real estate earlier under section 54 of the Income Tax Act, the gains you earned could be used to buy another house but after the announcement, the rollover benefit has been extended to two residential houses if your capital gains fall within the Rs 2 crore limit. The tax exemption would be given if you purchase a new residential property or construct a house within one year of the sale of the property or 2 years after the property has been sold. In case you are looking to construct a new house then you get up to 3 years to do so from the date of sell on the property.