Long-term capital gain tax: Everything Indian investors should know in 2026

Learn how long-term capital gain tax and short-term capital gains tax affect your property investments in 2026, and how Bajaj Finserv Home Loans can support smarter financial planning.

Property prices in India have been on a steady rise. Tax rules have also changed, and many buyers and investors are not fully aware of what these changes mean for them. Missing the details on long-term capital gain tax or short-term capital gains tax can quietly reduce the returns on a property sale.

Understanding these taxes is no longer optional. It is a practical step before you buy, hold, or sell any asset. Smart financing and tax planning now work together for property investors. Bajaj Finserv Home Loan offers a structured way to plan your property purchase, with flexible EMIs and manageable repayment tenures that can fit around your broader investment goals.

Understanding long-term capital gain tax in India

What is long-term capital gain tax?

Long-term capital gain tax (LTCG) applies to the profit you earn from selling an asset held beyond a specified period. For immovable property such as land or a building, the holding period is 24 months or more. For listed equity shares and equity mutual funds, it is 12 months.

Under the Finance Act 2024, effective from FY 2025-26 (AY 2026-27), the LTCG tax rate for most assets has been set at 12.5% without indexation. For property purchased before 23 July 2024, you may still choose between 12.5% without indexation or 20% with indexation, depending on which is more favourable.

For equity assets, gains up to Rs. 1.25 lakh per year are exempt. Beyond this threshold, the 12.5% rate applies. A surcharge of up to 15% based on total income, plus a 4% cess, applies on top of the base tax.

The formula for calculating LTCG is straightforward:

LTCG = Sale value – (Cost of acquisition + Cost of improvement + Transfer expenses)

What is short-term capital gains tax?

Short-term capital gains tax (STCG) applies when you sell an asset before the minimum holding period ends. For property, that means selling within 24 months of purchase. For listed equities, it is within 12 months.

Short-term capital gains tax rates are generally less favourable than long-term rates. For listed equities and equity mutual funds, STCG is taxed at 20%. For property and other assets, gains are added to your total income and taxed at your applicable income tax slab rate, which can be considerably higher.

The table below compares the two taxes at a glance:

The key takeaway is clear: holding a property for longer periods can reduce your overall tax liability. This is one reason why long-term planning matters from the moment you decide to invest.

Why home buyers must plan taxes before investing

Buying property without considering taxes may increase your total ownership costs in ways you do not expect. When you eventually sell a property, the tax on your gains can affect your net returns significantly. This is why tax planning before you invest can make a measurable difference.

Repayment planning matters just as much. If your EMI is too high relative to your income, meeting tax obligations later can create financial pressure. Choosing a loan with a longer tenure can lower your monthly EMI and keep more funds available for other needs, including tax payments or reinvestment.

Bajaj Finserv Home Loan can help buyers manage these decisions with greater confidence. With loan tenures of up to 32 years and EMIs starting from Rs. 671 per lakh*, buyers can plan their finances without stretching their monthly budgets.

How Bajaj Finserv Home Loan supports smarter property planning

Bajaj Finserv Home Loan gives buyers access to a range of features that can support long-term property investment planning. The combination of a high loan amount, competitive interest rates, and a long repayment tenure makes it a practical option for buyers across income segments.

Here are its many borrower-friendly features and benefits:

• Support for property investment goals: From fresh home loans to balance transfers and top-up loans, the available options can adapt to different stages of your property investment plan.
• Loan amount up to Rs. 15 crore*: This allows buyers to consider higher-value properties without limiting their choices based on upfront capital alone.
• Interest rates starting from 7.25% p.a.*: Lower interest rates mean you pay less over the life of the loan, which can improve your overall investment returns.
• EMIs starting from Rs. 671 per lakh*: Affordable EMIs make it easier to maintain consistent repayment without disrupting other financial obligations.
• Tenure up to 32 years: A longer tenure gives you the option to keep monthly payments low while managing other investment or tax-related commitments.
• Approval within 48 hours*: Quick approval allows you to plan your property timeline with reasonable confidence and fewer delays.
• No foreclosure fee for eligible individual borrowers: Individual borrowers who choose a floating interest rate can prepay or foreclose the loan without paying any additional charges, which adds useful flexibility to repayment planning.
• Externally benchmarked interest rates: You can choose interest rates linked to an external benchmark, such as the repo rate. This option can work in your favour during periods when interest rates are falling.
• Top-up loan up to Rs. 1 crore*: Existing borrowers who transfer their loan can access additional funds at home loan interest rates, which are generally lower than personal loan rates.
• Hassle-free application process: The application is designed to reduce paperwork and branch visits, making the process more convenient for working professionals and self-employed individuals alike.
• Doorstep document pick-up: A representative can collect your documents from your location, which can save time and simplify the process further.

Why this matters for investors

For property investors, cash flow management is central to a sound investment strategy. Long-term capital gain tax obligations and short-term capital gains tax exposure both affect net returns. A well-structured home loan can help investors preserve liquidity for these obligations.

Eligibility criteria and documents required for Bajaj Finserv Home Loan

Steps to apply for a Bajaj Finserv Home Loan

Application takes just a few minutes and can be completed entirely online:

• Click on the ‘APPLY’ button on the Bajaj Finserv Home Loan page.
• Enter your full name, mobile number, and employment type.
• Select the type of loan you wish to apply for.
• Generate and submit your OTP to verify your phone number.
• After OTP verification, enter additional details such as your monthly income, required loan amount, and whether you have identified a property.
• In the next steps, enter your date of birth, PAN number, and other details as required based on your occupation type.
• Click on the ‘SUBMIT’ button.

Your application is submitted. A representative from Bajaj Finserv will contact you and guide you through the next steps.

Long-term capital gain tax and short-term capital gains tax can both affect your property investment returns in ways that are easy to underestimate. Knowing the difference between the two, and planning your purchase and sale timelines accordingly, can help you retain more of what you earn.

Financing decisions are closely linked to these outcomes. A Bajaj Finserv Home Loan with a long tenure, low interest rates, and no foreclosure fee for eligible borrowers can give you the flexibility to hold property for the right duration. Visit the official website to check your eligibility today, estimate your EMI, and apply online for your Bajaj Finserv Home Loan.