India Investment Taxation
Capital gains, income tax & TDS rules across equity, debt and government schemes. Rates reflect Finance (No.2) Act 2024 changes effective 23 July 2024.
Equity investments
LTCG taxable only on gains exceeding ₹1.25 lakh/FY. STT must be paid on purchase & sale. No indexation benefit. Rates revised from 15%→20% (STCG) and 10%→12.5% (LTCG) w.e.f. 23 Jul 2024.
3-year lock-in period. ₹1.25L annual LTCG exemption applies. Section 80C deductions available only under the old tax regime.
Debt & fixed income
Funds with ≤35% equity bought after 1 Apr 2023 (Sec 50AA): all gains taxed as STCG at slab rate regardless of holding period. No LTCG benefit available.
Taxed under "Income from Other Sources". TDS at 10% (with PAN) or 20% (without PAN). Thresholds raised from ₹40,000 / ₹50,000 effective 1 Apr 2025 per Budget 2025.
Unlisted bonds / debentures acquired after 1 Apr 2023: always STCG at slab rate (Sec 50AA). Listed bonds: 12-month threshold for LTCG. Indexation removed post 23 Jul 2024.
Government & post office schemes
PPF: up to ₹1.5L/year qualifies under 80C (old regime). SSY: same limit. Fully exempt at all three stages. PPF matures after 15 years; extendable in 5-year blocks.
Principal qualifies for 80C deduction up to ₹1.5L (old regime). Maximum deposit: ₹30 lakh. Interest paid quarterly.
40% of corpus must purchase annuity; annuity income taxed at slab rate. Employer NPS deduction raised from 10% → 14% of basic under the new regime (Budget 2024).
Tax-free redemption only for original allottees holding to 8-year maturity. Secondary buyers: LTCG at 12.5% if held >12 months; STCG at 20% if ≤12 months. Interest taxable regardless.
Alternative schemes
Aggregate premium threshold applies across all ULIPs held. For taxable ULIPs: LTCG at 12.5% if held >12 months; STCG at 20% if ≤12 months (equity-linked units).
Capital gains taxed like equity instruments (Sec 111A / 112A). ₹1.25L annual LTCG exemption applies. STT applicable on exchange-traded units.