New July 23 Tax Rule Could Raise Your Capital Gains Bill: Here’s What Changed

A major update in India’s capital gains tax rules took effect from July 23, 2024, under the Finance (No. 2) Bill, 2024. If you sold assets like property, shares, gold, or debt instruments on or after this date, the new tax rules apply. If the sale happened before July 23, the old tax structure continues. This change could significantly affect how much tax you owe in your ITR for AY 2025–26.

What Are the New Capital Gains Tax Rules?

Property Sales

Earlier, selling a property held for at least 2 years was taxed at 20% with indexation benefits. Now, it’s a flat 12.5% without indexation for post-July 23 sales.
If the property was bought before July 23 but sold after, resident individuals and HUFs can choose between the old and new rates—whichever is more beneficial.

Shares

• Sold before July 23: LTCG taxed at 10% beyond ₹1 lakh exemption.
• Sold after July 23: Rate increases to 12.5%, but exemption limit rises slightly to ₹1.25 lakh.
• Short-term gains (STCG) rate goes from 15% to 20% after the change. 

Gold, Debt & Other Capital Assets

The holding period for LTCG classification drops from 3 years to 2 years. Tax is now a flat 12.5% with no indexation on post-July 23 sales.

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Filing Your ITR for AY 2025–26: Key Steps

• Use Form ITR-2 (unless you have business income).
• Report capital gains based on sale date:
  • Apply old regime for sales before July 23.
  • Apply new rules for sales after July 23.
• For property sales after July 23 but bought earlier, choose the lower of 12.5% or 20% with indexation.
• Submit all required documents like sale deeds, broker statements, improvement bills, PAN, Aadhaar, and bank details.
• The filing deadline is 15 September 2025. Be sure to verify within 30 days via Aadhaar OTP, net banking, or post.

Conclusion

The new capital gains tax rules, effective July 23, 2024, change how much tax you may owe when selling assets. While some investors may benefit, others could pay more if they miss key details. Double-check sale dates, tax rates, and exemptions while filing your ITR for AY 2025–26 to avoid unnecessary payments.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.