A Capital Gains Calculator is a financial tool that helps investors calculate the profit or loss earned from selling an investment or asset. It is especially useful for understanding Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG) in India.

Why Use a Capital Gains Calculator?

Investors use a Capital Gains Calculator to accurately estimate taxes payable, plan their investments, and track profits. It helps in deciding when to sell an asset to optimize tax liabilities.

Capital Gains Formulas

To calculate capital gains, the formulas are:

Short-Term Capital Gains (STCG) = Sale Price - Purchase Price (for assets held ≤ 12 months)

Long-Term Capital Gains (LTCG) = Sale Price - Purchase Price (for assets held > 12 months)
            

Example

Suppose you bought 100 shares of a stock at ₹200 per share and sold them at ₹250 per share after 10 months:

Quantity = 100 shares
Purchase Price = ₹200
Sale Price = ₹250
Holding Period = 10 months (STCG)

STCG = (Sale Price - Purchase Price) × Quantity
STCG = (250 - 200) × 100 = ₹5,000
            

If you held the shares for 18 months instead, it would be classified as LTCG:

LTCG = (Sale Price - Purchase Price) × Quantity
LTCG = (250 - 200) × 100 = ₹5,000
            

Benefits of Using a Capital Gains Calculator

• Instantly calculates potential profits and losses
• Helps in tax planning for STCG and LTCG
• Supports smarter decision-making for investments
• Useful for stocks, mutual funds, and other capital assets