Capital Gains Calculator
Estimate gain, tax due, and after-tax gain.
What are Capital Gains?
Capital gains are the profit earned when you sell a capital asset (stocks, real estate, mutual funds, gold, etc.) for more than you paid. The gain is calculated as Selling Price minus Cost Basis. Capital gains are taxed differently based on how long you held the asset—short-term or long-term.
Capital Gains Calculation
Capital Gain = Selling Price - (Purchase Price + Improvement Costs + Transaction Costs). For long-term assets, indexation may apply: Indexed Cost = Purchase Price x (CII of Sale Year / CII of Purchase Year). Tax = Capital Gain x Applicable Tax Rate.
Short-Term vs Long-Term Capital Gains
Short-term: Assets held less than the specified period (typically 12 months for stocks). Taxed at your regular income tax rate. Long-term: Assets held longer than the specified period. Taxed at preferential lower rates (typically 10-20%). The holding period threshold varies by asset type.
How to Reduce Capital Gains Tax
Hold assets longer to qualify for long-term rates. Use tax-loss harvesting (offset gains with losses). Reinvest gains in specified instruments (primary residence, tax-free bonds). Use indexation benefit for long-term assets. Time your sales to stay in lower tax brackets. Donate appreciated assets to charity.
Capital Gains on Common Assets
- •Stocks: Short-term (<12 months) taxed at income rate; long-term taxed at 10-20%. Real estate: Short-term (<24-36 months) taxed at income rate; long-term with indexation benefit at 20%. Mutual funds: Equity funds (<12 months STCG at 15%, >12 months LTCG at 10% above exemption). Debt funds: Taxed as per income slab with/without indexation.
Comparison Analysis
Short-Term vs Long-Term Capital Gains
| Criteria | Short-Term Capital Gains | Long-Term Capital Gains |
|---|---|---|
| Holding Period (Stocks) | Less than 12 months | 12 months or more |
| Holding Period (Real Estate) | Less than 24-36 months | 24-36 months or more |
| Tax Rate | Regular income tax rate | Preferential rate (10-20%) |
| Indexation Benefit | Not available | Available for certain assets |
| Loss Set-off | Against both ST and LT gains | Only against LT gains |
Content Verification
Expert Review
Reviewed by Rachel Thompson, Certified Public Accountant (CPA), Tax Planning Specialist
Authoritative Sources
Based on IRS regulations, SEC guidelines, and current capital gains tax laws
Last Reviewed
Content verified May 2026 against current capital gains tax rates and regulations