Holding-period rules for every asset class (India tax)

One of the most confusing parts of Indian capital gains tax is that every asset class has a different holding period threshold for long-term capital gains. Indian listed equity is 12 months. US equity is 24 months. Real estate is 24 months. Gold is 36 months (mostly). Bonds are different again.

Get the threshold wrong and you can pay 2–3x the tax you should have. This post is the complete reference.

The fundamental question

For any asset, three questions:

1. What is the LTCG holding period threshold?
2. What is the LTCG tax rate?
3. What is the STCG (short-term) tax rate?

The answers vary by asset class. Here's the table:

The complete holding-period reference

Asset class	LTCG threshold	LTCG rate	STCG rate	Notes
Indian listed equity (NSE/BSE stocks, ETFs)	12 months	12.5% above ₹1.25L exempt	20%	Post Budget 2024 rates
Indian equity mutual funds (≥65% equity)	12 months	12.5% above ₹1.25L	20%	Same as direct equity
Indian listed REITs (Embassy, Mindspace, etc.)	12 months	12.5%	20%	Post-2023 reform
Indian unlisted equity / private company shares	24 months	12.5%	Slab rate	No exemption
US-listed equity (stocks, ETFs)	24 months	12.5%	Slab rate	No exemption, no indexation
RSUs from US employer	24 months from vest	12.5%	Slab rate	Same as US-listed equity
ESPP shares	24 months from purchase	12.5%	Slab rate	Same as US-listed equity
Indian debt mutual funds (post April 2023)	N/A	Slab rate (no LTCG benefit)	Slab rate	Treated as debt
Indian listed bonds (govt + corp)	12 months	12.5%	Slab rate	LTCG benefit retained
Indian unlisted bonds	24 months	12.5%	Slab rate
Real estate (residential/commercial)	24 months	12.5% (after Budget 2024)	Slab rate	Indexation removed for new acquisitions
Gold (physical, jewelry)	24 months	12.5%	Slab rate	Pre-Budget 2024: 36 months & 20% with indexation
Sovereign Gold Bonds (held to maturity)	N/A	Tax-free at maturity	N/A	8-year maturity, redemption is tax-free
Sovereign Gold Bonds (sold before maturity)	12 months	12.5%	Slab rate	Treated as listed bond
Gold ETFs (Indian)	24 months	12.5%	Slab rate	Post Budget 2024
US gold ETFs (GLD, IAU)	24 months	12.5%	Slab rate	Foreign equity treatment
Cryptocurrency	N/A (special regime)	30% flat	30% flat	Plus 1% TDS on transactions over ₹10k/yr

A few notes on the table:

• The numbers reflect post-Budget 2024 rates unless otherwise noted.
• "Slab rate" means your marginal income-tax bracket (5% / 20% / 30% etc., plus surcharge and cess).
• "12.5%" is the post-Budget 2024 unified LTCG rate (was 10% / 20% with indexation depending on asset before).
• The ₹1.25L exemption applies only to Indian listed equity / equity-MF / REIT LTCG.

The most common confusions

Confusion 1: "All equity is 12 months"

False. Only Indian listed equity is 12 months. US equity is 24 months. Indian unlisted equity is 24 months.

The 12-month threshold is specifically for listed equity on Indian stock exchanges. Anything else is 24 months.

Confusion 2: "I bought VTI through an Indian platform, so it's Indian"

False. The platform is Indian; the underlying ETF is US-listed. You hold a US-domiciled fund. The 24-month threshold applies.

Confusion 3: RSUs use the grant date

False. The holding period for RSUs starts at the vest date, not grant. A 4-year RSU grant from 2022 with a March 2026 vest has been "held" for 0 days at vest, not 4 years.

Confusion 4: ESPPs use the offering period start

False. The ESPP holding period for LTCG starts at the purchase date (typically the end of the 6-month offering period, when shares actually got delivered).

Confusion 5: "I had to wait > 1 year for STCG to convert to LTCG"

For US equity, RSUs, ESPPs: it's > 24 months, not > 12. The 1-year rule is for Indian listed stock.

Confusion 6: Gold is 36 months

For acquisitions before April 2023, gold's holding period was 36 months. Budget 2023 and Budget 2024 changed this to 24 months for newer acquisitions, with the LTCG rate moving from 20% (with indexation) to 12.5% (no indexation).

If you have older gold (purchased pre-2023), check current guidance — there may be transitional rules.

Confusion 7: Indexation is gone

For property and gold, indexation (adjusting cost basis for inflation) used to apply for LTCG. Budget 2024 removed indexation for these asset classes, replacing it with a flat 12.5% rate.

For Indian listed equity, indexation was never available (LTCG was always 10% above ₹1L).

For foreign equity, indexation was never available.

The real-cost implication of the holding-period rules

Why does this matter so much? Two reasons:

Reason 1: Tax differential is large

For someone in the 30% slab + 15% surcharge + cess (~36% effective short-term rate):

Asset	Selling at month before LTCG threshold	Selling after LTCG threshold	Tax differential on ₹1L gain
Indian listed stock @ month 11 vs. 13	20%	12.5%	₹7,500 lower
US stock @ month 23 vs. 25	~36%	12.5%	₹23,500 lower
Real estate @ month 23 vs. 25	~36%	12.5%	₹23,500 lower

The biggest jump (Indian stock 20% → 12.5%) is small. The biggest jumps for foreign equity and real estate are massive — they're slab rate vs. 12.5%, a 2-3x difference.

This is why "holding for 24 months" matters so much for US equity and RSUs. On a ₹5 lakh gain, the difference between selling at month 23 vs. month 25 is ~₹1.2 lakh of tax.

Reason 2: The penalty for getting it wrong is asymmetric

If you sell at month 25 thinking it's STCG when it's actually LTCG, you'll only over-pay tax — recoverable through ITR amendment (annoying but possible).

If you sell at month 23 thinking it's LTCG when it's actually STCG, you under-pay tax. The IT department's notice arrives 2 years later with interest and possibly penalties.

Getting the holding period right is important; the cost of being wrong is asymmetric.

How to track holding periods

For each lot of any asset, track:

1. Acquisition date: when you bought / vested / purchased.
2. Acquisition cost in INR: USD × USD/INR (SBI TT-buying rate) on acquisition date.
3. Asset class: what bucket above does this fall into?
4. LTCG threshold for this asset class: from the table above.

Maintain a spreadsheet (or use your broker's lot-tracking if good) with these columns. Sort by acquisition date for FIFO planning.

When considering a sale, check: how long has each lot been held? Which lots are LTCG-eligible? If selling for tax-loss reasons, prefer short-term losses (offset against any gain category) over long-term losses (only offset long-term gains).

Specific lot identification

For Indian listed equity, the IT Department generally accepts FIFO. For US equity, you can usually choose specific lots (most US brokers support this).

Specific lot ID lets you optimize:

• Sell long-term lots when you want low-tax sale.
• Sell short-term losers to offset gains.
• Hold high-cost-basis lots (smaller embedded gain).

For RSUs and ESPPs especially, specific lot ID is valuable — different vest tranches will have different cost bases and different holding periods.

A worked example: planning a sale of US equity

Suppose you have:

• 100 shares of VTI bought at $200 in March 2024 (cost basis ₹16.6 lakh).
• 50 shares of VTI bought at $250 in October 2024 (cost basis ₹10.4 lakh).
• 30 shares of VTI bought at $290 in March 2025 (cost basis ₹7.3 lakh).

Today is December 2026. You want to sell ₹15 lakh worth (~50 shares at current price of $300).

Lot	Acquisition	Holding period today	Tax treatment
March 2024 (100 shares)	33 months	LTCG	12.5%
October 2024 (50 shares)	26 months	LTCG	12.5%
March 2025 (30 shares)	21 months	STCG	Slab rate

Selling 50 shares from the March 2024 lot is ideal:

• All 50 are LTCG.
• Cost basis: 50/100 × ₹16.6 lakh = ₹8.3 lakh.
• Sale proceeds: 50 × $300 × ₹86 = ₹12.9 lakh (assuming USD/INR = ₹86).
• LTCG: ₹4.6 lakh.
• Tax @ 12.5% + cess: ₹59,800.

Selling from the March 2025 lot would be:

• STCG (held only 21 months).
• Tax at slab + surcharge + cess (~36%).
• Same ₹4.6 lakh gain → ₹1,65,600 tax.

Same gain, ₹1 lakh of tax difference purely from lot selection.

The Budget 2024 changes

A quick recap of recent changes that affected holding periods:

1. Indian listed equity LTCG: rate went from 10% to 12.5%; ₹1L exemption became ₹1.25L. Holding period unchanged (still 12 months).

2. Real estate LTCG: rate went from 20% with indexation to 12.5% without indexation. Holding period unchanged (24 months).

3. Gold LTCG: rate went from 20% with indexation to 12.5% without indexation. Holding period reduced from 36 to 24 months for new acquisitions.

4. Foreign equity (incl. US stocks): rate from 20% to 12.5%. Holding period unchanged (still 24 months).

5. Debt mutual funds: indexation benefit removed for funds bought after April 2023; treated as slab-rate income regardless of holding period.

The unifying theme: most LTCG rates moved to a flat 12.5%. Most threshold periods stayed the same.

A quick-reference flowchart

For a given asset:

1. Is it Indian-listed equity / equity MF / Indian REIT? → 12 months for LTCG @ 12.5%.
2. Is it US-listed (any kind, stocks/ETFs/REITs)? → 24 months for LTCG @ 12.5%.
3. Is it Indian unlisted equity / private shares? → 24 months for LTCG @ 12.5%.
4. Is it Indian real estate? → 24 months for LTCG @ 12.5%.
5. Is it gold (any form except SGB held to maturity)? → 24 months for LTCG @ 12.5%.
6. Is it crypto? → 30% flat regardless of period.
7. Is it Indian debt mutual fund acquired after April 2023? → Slab rate, no LTCG benefit.

Memorize these. The rest are edge cases.

The summary

Holding-period rules are different per asset class. The most important specific facts:

• Indian listed equity: 12 months → LTCG.
• US-listed equity (incl. RSUs/ESPPs): 24 months → LTCG.
• Real estate, gold: 24 months → LTCG.
• Crypto: 30% flat, period doesn't matter.

The tax differential between LTCG and STCG is largest for foreign equity (12.5% vs. ~36% slab). For asset classes where the differential is large, paying attention to the holding period — and waiting a few extra weeks if necessary — can save lakhs in tax per sale.

When in doubt, refer back to the table at the top of this post. Save it; you'll need it.