Tax Terms
4 terms- Indexation Benefit
- Adjusting an asset's purchase price for inflation (opens in new tab) before computing capital gains (opens in new tab) tax, historically available on debt mutual funds and real estate, reducing the taxable gain. Indexation was removed for equity investments after the 2024 Budget.
- Long-Term Capital Gains (LTCG)
- Profit from selling an asset held beyond a specified minimum period, which for listed equity and equity mutual funds is more than one year. As of the 2024 Budget, LTCG on equity above ₹1.25 lakh in a financial year is taxed at 12.5%, with no indexation (opens in new tab) benefit.
- Section 80C
- A provision of the Income Tax Act allowing deductions of up to ₹1.5 lakh a year for specified investments and expenses, including ELSS (opens in new tab), PPF (opens in new tab), EPF, and life insurance premiums, under the old tax regime.
- Short-Term Capital Gains (STCG)
- Profit from selling an asset held for less than the specified minimum period. For listed equity and equity mutual funds (held under one year), STCG is taxed at a flat 20%.
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