Calculating your capital gains tax is straightforward once you know the Capital Gains Tax formula and what each input means. This guide explains the method in plain language, walks through a manual calculation, and gives worked examples you can follow — then you can do it instantly with the Capital Gains Tax Calculator.
What is Capital Gains Tax?
The Capital Gains Tax calculation tells you your capital gains tax from a few simple inputs. The figure you are solving for here is the capital gains tax, expressed in INR.
The Capital Gains Tax formula
This calculation combines several inputs through a multi-step method rather than a single one-line formula. Enter the values below and the calculator resolves each step in order. The inputs it needs are:
- Purchase price — a money amount. Example: ₹2,00,000.
- Sale price — a money amount. Example: ₹5,00,000.
- Holding period — a value measured in months. Example: 18 months.
How to calculate it step by step
- Write down the purchase price (for example, ₹2,00,000).
- Write down the sale price (for example, ₹5,00,000).
- Write down the holding period (for example, 18 months).
- Apply the formula above to get your capital gains tax.
- Double-check the result with the Capital Gains Tax Calculator.
Worked examples
Example 1
| Input / Output | Value |
|---|---|
| Purchase price | ₹2,00,000 |
| Sale price | ₹5,00,000 |
| Holding period | 18 months |
| Capital gain | ₹3,00,000 |
| Capital gains tax | ₹21,875 |
| Net gain after tax | ₹2,78,125 |
With purchase price of ₹2,00,000, sale price of ₹5,00,000 and holding period of 18 months, the capital gains tax works out to ₹21,875.
Example 2
With purchase price of ₹4,00,000, sale price of ₹5,00,000 and holding period of 18 months, the capital gains tax works out to ₹0.
| Result | Value |
|---|---|
| Capital gain | ₹1,00,000 |
| Capital gains tax | ₹0 |
| Net gain after tax | ₹1,00,000 |
Example 3
With purchase price of ₹1,00,000, sale price of ₹5,00,000 and holding period of 18 months, the capital gains tax works out to ₹34,375.
| Result | Value |
|---|---|
| Capital gain | ₹4,00,000 |
| Capital gains tax | ₹34,375 |
| Net gain after tax | ₹3,65,625 |
Tips for an accurate result
- Keep your units consistent — mixing, say, months with years or grams with kilograms is the most common source of error.
- Round only at the very end. Rounding inputs early can shift the final answer noticeably.
- Re-run the numbers whenever an input changes, rather than estimating from an old result.
- Annual rates must be converted to the period you are calculating for (for example, divide an annual rate by 12 for a monthly figure).
Prefer not to do the maths by hand? — the Capital Gains Tax Calculator does it instantly, for free, with the formula and a worked example built in.
Related calculators
Continue exploring tax calculators with these tools: GST Calculator, Income Tax Calculator, HRA Calculator, Take-Home Salary Calculator, Old vs New Tax Regime Calculator.