Your broker statement rarely tells the whole tax story
Equity investing got simpler to do and more complex to tax. After the July-2024 changes, the rates on listed shares and equity mutual funds moved, the exemption limit rose, and the set-off rules quietly became the difference between a fair tax bill and an inflated one. Your broker's capital-gains statement shows the numbers — but not which losses can offset which gains, or how debt funds are treated differently. Here is how it actually works in 2026.
Short-term vs long-term on equity
For listed shares and equity mutual funds, a holding of more than 12 months is long-term; 12 months or less is short-term. Short-term gains (Section 111A) are taxed at 20% (for transfers on or after 23 July 2024). Long-term gains (Section 112A) are taxed at 12.5% on the amount exceeding ₹1.25 lakh in the year — the first ₹1.25 lakh of LTCG is exempt.
Debt mutual funds are taxed differently
For debt mutual funds purchased on or after 1 April 2023, there is no long-term benefit — gains are added to income and taxed at your slab rate, regardless of holding period. This single rule surprises investors who assumed all "mutual funds" are taxed alike. Hybrid funds depend on their equity allocation, so check the fund's tax category before you assume the equity rates apply.
The set-off most investors miss
This is where money is left on the table. Short-term capital losses can be set off against both short-term and long-term gains. Long-term capital losses can be set off only against long-term gains. Unused losses can be carried forward for eight assessment years — but only if you file your return by the due date. Investors who don't file on time silently forfeit the right to carry losses forward, paying full tax on future gains they could have offset.
A worked example
Say you booked ₹3 lakh of LTCG on equity funds and a ₹50,000 short-term loss on shares. The short-term loss offsets ₹50,000 of gains; of the remaining ₹2.5 lakh LTCG, the first ₹1.25 lakh is exempt, and 12.5% applies to ₹1.25 lakh — a tax of about ₹15,625, not the ₹37,500 a naive reading of the statement might suggest.
Reconcile with your AIS, then file
Every sale is reported to the department and appears in your AIS. Before filing, match your broker and AMC statements to the AIS, apply the set-offs, and report the gains in the correct schedule of ITR-2 (or ITR-3 if you also trade F&O). Filing on time is not just compliance — it is what preserves your loss carry-forward.
The bottom line
Know your holding periods, treat debt funds correctly, apply the set-off in the right order, and file by the due date. Done properly, equity taxation in 2026 is very manageable — and often lighter than investors fear.
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Pune note
Pune investors: let the set-off work for you. Pune's salaried investor base — IT professionals in Hinjewadi and Kharadi, dual-income households in Baner and Aundh — increasingly runs sizeable equity and mutual-fund portfolios, and the tax often gets misread off a single broker statement. At RDA Tax Advisory Services, Baner, we take your consolidated capital-gains statements from every broker and AMC, apply the correct holding periods, separate equity from debt funds, and order the loss set-offs to minimise tax. Crucially, we file on time so your capital losses carry forward for eight years instead of being forfeited — a benefit many self-filers lose without realising it. We also reconcile every sale against your AIS so the return doesn't draw a notice. Whether you hold a focused portfolio or trade actively alongside F&O, bring us your statements before filing: Office No. 102, Snehraj Apartment, Baner, Pune 411045, or call +91 77570 45059. The right set-off, claimed on time, is real money kept.
File with RDA
Confused by your broker's capital-gains statement? We compute STCG/LTCG, apply the set-offs, preserve your loss carry-forward, and file. Book a review at rdatax.in or call +91 77570 45059 — RDA Tax Advisory Services, Baner, Pune.
