India Capital Gains Tax, Filing Deadlines, Core Structural Difference

(UNITED STATES) — The next hard tax deadline for many immigrants and cross-border investors is April 15, 2026, when U.S. federal returns for tax year 2025 are due, including capital gains reporting for stocks, crypto, and real estate.

This timing matters even if you are planning ahead for tax year 2026 (returns filed in 2027). Capital gains transactions often span calendar years.

Missed filings can trigger penalties, delay immigration paperwork that needs tax transcripts, and complicate foreign tax credit claims.

📅 Deadline Alert: April 15, 2026 is the U.S. due date for tax year 2025 individual returns, unless you qualify for an expat deadline or file an extension.

Key Filing Deadlines and Structural Framework

U.S. individual income tax generally runs on a calendar year. India generally follows a financial year, with assessment-year deadlines that vary by category.

Deadline summary (U.S. and India)

For U.S. residency rules, start with IRS Publication 519 and the IRS international taxpayers hub.

Core Structural Difference (why cross-border gains get messy)

The Core Structural Difference is how each country defines short-term versus long-term gains.

• India uses asset-type holding periods. Listed equity often turns long-term after 12 months. Property and some unlisted assets often use 24 months.
• The U.S. uses a uniform holding period. Short-term is 1 year or less. Long-term is more than 1 year.

The tax method differs too.

• In the U.S., short-term capital gains tax is your ordinary income tax rate. Long-term gains may qualify for 0% / 15% / 20% federal rates, based on taxable income.
• In India, many gains are taxed at special flat rates, instead of slab rates.

Indexation is another dividing line. India largely reduced indexation after post-2024 changes for many assets.

The U.S. generally has no indexation, but basis adjustments can apply.

Capital gains on shares / equity

India (listed shares and equity mutual funds)

• STCG (≤ 12 months): 20% (common post-2024 treatment for STT-paid equity under Section 111A changes).
• LTCG (> 12 months): 12.5%, but only on gains above ₹1.25 lakh per financial year.

Example: If your listed equity LTCG is ₹3,00,000, then ₹1,25,000 is exempt.

You generally compute tax on ₹1,75,000 at 12.5%, plus surcharge and cess.

U.S. (stocks)

• STCG: taxed at ordinary rates.
• LTCG: 0% / 15% / 20% depending on taxable income.

This is where planning matters. A U.S. taxpayer in the 0% LTCG bracket may owe $0 federal on a qualifying long-term sale, even though India might still tax the same sale.

Capital gains on property (immovable real estate)

India:

• STCG (≤ 24 months) is usually taxed at slab rates.
• LTCG (> 24 months) is commonly 12.5% after reforms, with limited indexation in many cases.
• Major relief provisions include Section 54, 54EC (bond cap ₹50 lakh), and 54F.

U.S.:

• STCG (≤ 1 year) is ordinary income.
• LTCG (> 1 year) can be 0% / 15% / 20%.
• A major break is the primary residence exclusion: $250,000 (single) or $500,000 (married filing jointly), if ownership and use tests are met.

Capital gains on other assets (gold and crypto)

• Gold: India often taxes long-term gains around 12.5% after reforms. The U.S. can treat certain precious metals as collectibles, with federal rates up to 28%.
• Crypto: India applies a special VDA regime in many cases. The U.S. generally treats crypto as property. Gains go on Form 8949 and Schedule D.

NRI / cross-border impact (U.S.–India)

Cross-border reporting is often the real trap.

• An NRI selling Indian shares or Indian property may owe India tax. If the person is a U.S. tax resident, the gain is also reportable in the U.S.
• A resident of India selling U.S. stocks may owe tax in India, even if the U.S. does not tax the capital gain in that situation.

Double taxation is often handled through the Foreign Tax Credit on Form 1116, and treaty positions in some cases.

IRS starting points include forms and publications and Publication 519.

Penalties for non-reporting and late filing

In the U.S., late filing can trigger a failure-to-file penalty of 5% per month, up to 25%. Late payment can add 0.5% per month, plus interest.

Accuracy-related penalties can be 20% in many cases. See IRS guidance in Publication 519 and Form 1040 instructions.

In India, late filing fees may apply under Section 234F, and interest can apply for unpaid tax. Capital gains can also create advance tax liability, and missed installments can add interest.

Extension options and disaster relief

A U.S. extension to October 15 (Form 4868) extends time to file, not time to pay. If you owe, pay by the original due date to reduce interest and penalties.

Disaster relief can postpone deadlines for taxpayers in federally declared disaster areas. Check the IRS Newsroom for current relief announcements.

Action items to prepare now

1. Track purchase and sale dates carefully to prove holding periods in both countries.
2. For U.S. reporting, keep brokerage 1099s and compute gains on Form 8949/Schedule D.
3. For India, confirm whether the ₹1.25 lakh listed-equity exemption applies to your gain type.
4. If you paid India tax and must report the gain in the U.S., model Form 1116 before you file.
5. If you are abroad on April 15, document your expat eligibility for the June 15 date, and consider Form 4868.