NISM-Series-X-B: Investment Adviser (Level 2) · Capital Gains

Capital Gains Tax on Property, Gold and Unlisted Shares

Updated 11 October 2026 · Fact-checked

Land, buildings, physical gold and unlisted shares are long term if held more than 24 months. Long-term gains are taxed at 12.5% without indexation for transfers on or after 23 July 2024, plus surcharge and cess. Short-term gains are added to income and taxed at slab rates. Check the holding period first, then the rate.

Understand Taxation of Other Assets: Property, Gold and Unlisted Shares

A capital gain is the profit on transfer of a capital asset. You first decide whether it is short term or long term. The holding period decides this. The class of asset decides the rate.

For land, buildings, physical gold, jewellery and unlisted shares, the asset is long term if held for more than 24 months. Listed shares and listed units are different: they need more than 12 months. Do not mix the two limits. Holding exactly 24 months is still short term, because the test is "more than".

For transfers on or after 23 July 2024, long-term capital gains on these assets are taxed at 12.5% with no indexation benefit. Short-term gains are added to your total income and taxed at your slab rate. Surcharge and 4% cess apply on top of the tax.

There is one special relief for property. A resident individual or HUF that acquired land or a building before 23 July 2024 can choose the lower tax of two methods: 12.5% without indexation, or 20% with indexation. Indexation inflates only the cost. It does not apply to gold or unlisted shares.

Sovereign Gold Bonds (SGBs) have their own rule. Interest of 2.5% a year is taxed as income from other sources. If an individual holds the bond until redemption by RBI, the capital gain is exempt. If the bond is sold on an exchange, the gain is taxed like a listed security: more than 12 months is long term at 12.5%, otherwise slab rates.

For property, tax law also looks at the stamp duty value. If it is higher than the sale price by more than 10%, the stamp duty value is treated as the sale price for computing the gain.

Key formulas to remember

Capital gain: Capital gain = Full value of consideration − (Cost of acquisition + Cost of improvement + Transfer expenses); Use indexed cost only where indexation is allowed, which means land or building acquired before 23 July 2024 under the 20% option.
Long-term holding period for unlisted assets: Land, building, gold, jewellery, unlisted shares: more than 24 months; Listed shares and listed units need more than 12 months.
LTCG rate on these assets: 12.5% without indexation (transfers on or after 23 July 2024); Surcharge and 4% cess are extra.
Property option for old assets: Tax = lower of (12.5% × gain without indexation) and (20% × gain with indexation); Only for resident individual or HUF, land or building acquired before 23 July 2024.
STCG rate: Taxed at slab rates as part of total income; Applies when the holding period is 24 months or less for these assets.
Sovereign Gold Bond: Interest: taxable. Redemption by RBI for an individual: exempt. Exchange sale: more than 12 months long term at 12.5%; Interest is taxable every year regardless of how the bond ends.
Stamp duty value rule for property: If stamp duty value > 110% of sale price, stamp duty value is used as sale price; Within the 10% tolerance, the actual sale price is used.

How to solve Taxation of Other Assets: Property, Gold and Unlisted Shares questions

Use this order for any question on gains from property, gold or unlisted shares. It keeps you from picking the wrong holding period or rate.

1Identify the asset: land or building, physical gold, SGB, gold ETF, or unlisted share.
2Note the purchase date and the sale date. Count the months held.
3Apply the holding-period test: more than 24 months for unlisted assets, more than 12 months for listed ones.
4Compute the gain: sale price (check the stamp duty value for property) minus cost, improvement cost and transfer expenses.
5If short term, add the gain to income and apply the slab rate.
6If long term, apply 12.5% without indexation. For old resident property, also test 20% with indexation and take the lower tax.
7Add surcharge and cess only if the question asks for the total tax. Check any exemption such as SGB redemption or Sections 54 and 54EC.

Quickest way: Month count, then rate

When to use it: Use this for one-mark MCQs where you must classify the gain or pick the rate quickly.

Ask: listed or unlisted? Listed means 12 months. Unlisted means 24 months.
If long term, the rate is 12.5% for nearly every option in this topic.
Only land or building bought before 23 July 2024 has the 20% with indexation choice.
If the SGB is held to RBI redemption by an individual, answer exempt.
Eliminate options that show 20% for unlisted shares or gold, or 36 months as a holding period.

Common mistakes in Taxation of Other Assets: Property, Gold and Unlisted Shares

Using 12 months as the long-term limit for property, gold or unlisted shares.
The 12-month rule for listed shares is learned first and then applied everywhere.
Fix: Link 24 months to unlisted and immovable assets. Link 12 months only to listed securities.
Calling an asset long term when it is held exactly 24 months.
Students read the rule as "24 months or more".
Fix: The rule is "more than 24 months". Exactly 24 months is short term.
Applying indexation to gold or unlisted shares.
Older material allowed indexation on all long-term assets other than listed securities.
Fix: Indexation now survives only as an option for land or building bought before 23 July 2024 by a resident individual or HUF.
Taxing SGB redemption gain at 12.5%.
Students treat SGBs like gold ETFs.
Fix: An individual who holds to RBI redemption pays no capital gains tax. The interest is still taxable.
Ignoring the stamp duty value when a house is sold below circle rate.
Students use only the agreed sale price.
Fix: Compare the stamp duty value with the price. If it is more than 10% higher, use the stamp duty value as the sale price.
Adding surcharge and cess when the question asks only for tax at the stated rate.
Students over-apply the rule from real tax filing.
Fix: Read the question. Add cess and surcharge only if it asks for total tax payable or gives the details.

Worked examples

Example 1

Rohan, a resident individual, bought a flat on 1 April 2020 for ₹40,00,000 and sold it on 15 December 2025 for ₹70,00,000. The stamp duty value equals the sale price. There are no other costs. Compute the long-term capital gains tax at 12.5% without indexation, before surcharge and cess.

Show the solution

Holding period: April 2020 to December 2025 is more than 5 years, which is more than 24 months. The gain is long term.
Gain = ₹70,00,000 − ₹40,00,000 = ₹30,00,000.
Tax at 12.5% = 30,00,000 × 12.5 ÷ 100 = ₹3,75,000.
Cess of 4% and any surcharge would be added on top. The question asks for tax before these.

Answer: ₹3,75,000 (long-term capital gains tax before surcharge and cess)

Example 2

Meera bought unlisted shares on 10 January 2023 and sold them on 20 February 2025 for a gain of ₹4,00,000. What is the capital gains tax before surcharge and cess? (A) ₹50,000 (B) ₹80,000 (C) ₹40,000 (D) ₹1,20,000

Show the solution

Unlisted shares need more than 24 months to be long term.
Holding: 10 January 2023 to 10 January 2025 is 24 months. Another month and ten days follow, so the holding is more than 24 months. The gain is long term.
LTCG rate on unlisted shares is 12.5% without indexation.
Tax = 4,00,000 × 12.5 ÷ 100 = ₹50,000.
Option B uses 20%, which is the old rate with indexation. Option C uses 10%. Option D assumes a 30% slab rate.

Answer: (A) ₹50,000

Exam tips

Memorise the two limits as a pair: 24 months for unlisted and immovable assets, 12 months for listed securities.
In a case question, check the dates before reading the rest. A wrong classification costs the whole answer.
Under negative marking, avoid guessing between 12.5% and 20%. Ask whether the asset is old resident property. If not, it is 12.5%.
Watch the words "redemption by RBI" and "sold on stock exchange" in SGB questions. They give different answers.
For property questions, scan for the stamp duty value or circle rate. It is a common hidden trap.

Practice questions from Capital Gains

Taxation of Other Assets: Property, Gold and Unlisted Shares: frequently asked questions

What is the holding period for unlisted shares to be long term?

Unlisted shares are long term if held for more than 24 months. Listed shares need more than 12 months. If you hold unlisted shares for 24 months or less, the gain is short term and taxed at slab rates.

What is the tax on sale of house property?

A house held for more than 24 months gives a long-term gain taxed at 12.5% without indexation for transfers on or after 23 July 2024. A resident individual or HUF that bought before that date may choose 20% with indexation if it gives lower tax. A shorter holding is taxed at slab rates.

Is capital gains tax payable on Sovereign Gold Bonds?

If an individual holds the bond until RBI redeems it, the capital gain is exempt. The annual interest is taxable as income from other sources. If you sell on an exchange, the gain is taxed as a listed security gain, with more than 12 months being long term.

Is indexation available on gold and unlisted shares now?

No. For transfers on or after 23 July 2024, the 12.5% rate applies without indexation on gold and unlisted shares. The only indexation choice left is for land or building bought before that date by a resident individual or HUF.