This post was most recently updated on December 23rd, 2022
Dealing with calculating the tax is tough tax in India especially when you know that there are multiple rules around calculating taxes as per the investment instruments.
let’s look at how tax is calculated for various investment instruments like stocks, Mutual funds, govt. bonds, Gold, property, Fixed deposits, etc.
how much tax you need to pay on the sale of Stock, Mutual fund, or Property?
As per income tax India the tax rates for investment instruments are as below:
| Asset | Long term definition | Long term tax | Short term tax | Note |
| Stocks | Sold after 1 year from purchase | 10% of profit | 15% of profit | Long-term tax is applicable only if profit exceeds 1 lakh in a financial year |
| Equity oriented mutual funds | Sold after 1 year from purchase | 10% of profit | 15% of profit | Long-term tax is applicable only if profit exceeds 1 lakh in the financial year |
| Non-equity mutual funds | Sold after 3 years from purchase | 20% of profit with indexation benefit | Profit added to total income | |
| Govt or corporate bonds | Sold after 3 years from purchase | 20% of profit with indexation benefit | Profit added to total income | |
| Gold | Sold after 3 years from purchase | 20% of profit with indexation benefit | Profit added to total income | |
| Gold ETF/Mutual fund | Sold after 3 years from purchase | 20% of profit with indexation benefit | Profit added to total income | |
| Property | Sold after 3 years from purchase | 20% of profit with indexation benefit | Profit added to total income | You can save long-term tax if you re-invest the money you got selling your property |
| Fixed deposits | No definition | Profit added to total income | Profit added to total income |
Consider using the tax calculator to know how much tax you need to pay with your investments.
While planning your investments you should be aware of the tax impacts for the investment options if you are in a high tax bracket then the post-tax returns in most of the instruments will not even beat inflation.
[…] Consider reading: How much tax you need to pay on the sale of shares and mutual funds […]