Long-Term Capital Gains (LTCG)
Profit from selling a capital asset held beyond a specified minimum period (commonly 12 or 24 months depending on the asset), taxed at rates generally lower than short-term gains.
Capital gains are classified as long-term once the underlying asset has been held beyond a minimum period that varies by asset type: listed equity shares and equity mutual funds generally use 12 months, while property, unlisted shares, and several other assets use 24 or 36 months depending on the category. LTCG on listed equity and equity mutual funds above a specified annual exemption threshold is taxed at a specific concessional rate, while LTCG on other assets follows different rate rules, sometimes with indexation benefits depending on the asset and the applicable year's rules.
The holding-period and rate rules have shifted across recent budgets, so it's worth confirming the specific rate and exemption threshold applicable for the year of sale rather than assuming an older figure still holds. Getting the holding period classification right matters directly, since short-term and long-term gains on the same asset type are often taxed quite differently.
This glossary entry is for general informational purposes only and does not constitute professional tax, legal, or financial advice. Rules and rates change, so consult a qualified Chartered Accountant for advice specific to your situation.