In India, selling shares or gold can create capital gains, while interest from a fixed deposit (FD) is generally reported as income from other sources. The tax result depends on the exact asset, transaction dates, applicable provision, taxpayer details and assessment year—not simply on whether an investment made money.
For the Income Tax Department’s notified AY 2026–27 return materials, qualifying listed-equity gains are shown in two special categories: section 111A short-term gains at 20% and section 112A long-term gains at 12.5%. Those rates are limited to their stated conditions. They are not universal rates for every share, security or tax year. Gold-specific rates and holding-period rules must be checked under the law governing the particular gold asset and its purchase and sale dates.
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The three investments are taxed at different points
| Investment | Event that can create taxable income | Typical tax head or category | Key records |
|---|---|---|---|
| Shares and other securities | Sale or another transfer that produces a gain or loss | Capital gains; a special rate may apply to qualifying listed-equity transactions | Broker capital-gain statement, contract notes, transaction dates, cost records and tax-credit statements |
| Gold | Sale or transfer of the specific gold asset | Capital gains, subject to the classification and rules applicable to jewellery, bullion, coins or a financial gold product | Purchase and sale invoices, making or storage charges where relevant, dates, quantity and product documents |
| Fixed deposit | Interest credited, accrued or received for the relevant tax year | Income from other sources | Bank passbook or statements, FD receipts, interest certificates, Form 16A where tax was deducted, Form 26AS and AIS |
A sale price by itself is not the taxable figure. For a capital asset, you generally need the transfer value, cost information, the relevant dates and any adjustment or provision that the current law permits. For an FD, you need the interest attributable to the year and then must include it in the computation of total income under the applicable tax regime.
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Start with the security and transaction
The Income Tax Department treats profit or gain from the transfer of a capital asset under the capital-gains head. Before applying a rate, identify whether the transaction is in listed equity or another type of security, whether it satisfies the conditions for a special provision, and the acquisition and disposal dates. The return schedules also require transaction information, so a broker statement alone should not replace your own check of dates and costs.
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AY 2026–27 listed-equity categories
The notified AY 2026–27 return materials show these figures for their qualifying categories:
| Provision and category | Rate shown in AY 2026–27 materials | What the figure does—and does not—mean |
|---|---|---|
| Section 111A short-term capital gains | 20% | A special rate for transactions that meet section 111A conditions; not a rate for every share profit |
| Section 112A long-term capital gains | 12.5% | A special rate for transactions that meet section 112A conditions; not a universal long-term rate for all securities |
The same department’s salaried-filer eligibility guidance refers to a ₹1.25 lakh section 112A threshold when explaining whether a simpler return can be used. Treat that figure as an eligibility condition in the cited filing guidance, not as a blanket tax-free allowance or as proof that every investor can use the same return form.
Do not assume a holding period
Holding-period rules vary with the asset and the governing provision. Older explanatory material can contain legacy periods that do not match the current schedule or the law applicable to your transaction. For listed and unlisted shares, debt instruments and other securities, verify the exact holding-period test for the relevant acquisition and transfer dates before labelling a gain short term or long term. A transaction date can also affect which rate schedule applies.
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What a share-gain computation should contain
- List each sale or transfer, including the security identifier, quantity and transaction date.
- Record the sale consideration and the cost basis shown by reliable purchase records. Check corporate actions, such as splits or bonuses, if they affect the broker’s adjusted cost.
- Classify the transaction under the provision that actually applies; do not select 20% or 12.5% solely because the investment was a “stock.”
- Separate short-term and long-term entries in the return schedule and carry any permitted loss or exemption treatment according to the current instructions.
- Reconcile the resulting tax with the tax already paid or withheld. Surcharge, cess, taxpayer status, exemptions and other income can change the final amount.
How gold is taxed: identify the product before the rate
Gold cannot safely be given one rate in this guide. The applicable result can depend on whether you sold jewellery, bullion, coins or a financial gold instrument, as well as on the purchase and disposal dates and the law in force for that transaction. The available AY 2026–27 material does not reliably settle one current gold-specific holding period or rate for all of these categories.
Why a jewellery sale is not automatically the same as a financial product
- Jewellery and bullion are physical capital assets, with invoices and quantity or purity details that may be relevant to the cost calculation.
- A coin or bar may have different documentation from a jewellery purchase, especially where making charges, wastage or storage are shown separately.
- A financial gold product can have its own legal and reporting treatment. Do not import the listed-equity section 111A or 112A rates into that product without confirming eligibility.
Records to keep for a gold disposal
Retain the purchase invoice, sale invoice, date of each transaction, quantity, purity or product identifier, and evidence of payment. For jewellery, preserve documents that separately show making charges or other components. If the asset was inherited or gifted, collect the prior owner’s cost and acquisition details and obtain professional advice on the applicable rule rather than guessing a cost basis.
A safe way to handle an unresolved gold classification
- Describe the asset precisely in your working papers: jewellery, bullion, coin, exchange-traded or other financial product.
- Match the purchase and sale dates to the law and return instructions for the assessment year concerned.
- Check whether a special computation, exemption or loss rule applies to that exact asset.
- Use the relevant capital-gain schedule and retain documents supporting both the amount and the classification.
Until those checks are complete, quoting a single “gold tax rate” can produce the wrong return. The rates published for listed equity do not resolve gold treatment.
How fixed-deposit interest is reported
Interest belongs in income from other sources
Official return guidance places bank and deposit interest in the income-from-other-sources context. Use the bank passbook, account statement, FD receipts and an interest certificate to determine the amount attributable to the relevant year. If the bank credits interest periodically or pays it at maturity, follow the applicable accounting and tax instructions for the year rather than reporting only the cash withdrawn.
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TDS is a credit, not automatically the final tax
When a bank deducts tax, Form 16A records the deduction. Check that certificate against Form 26AS and the Annual Information Statement (AIS). The amount appearing as tax deducted is a credit against your liability, not a substitute for including the full taxable interest and calculating tax on total income. If the bank’s reported figure is missing or incorrect, ask the bank to correct its reporting and retain correspondence.
Do not rely on an unverified threshold
The material used for this guide does not establish one current FD-interest TDS threshold that applies to every depositor, bank, age group or tax regime. Thresholds and exceptions can change. Check the current law and the bank’s current TDS guidance for the relevant year instead of copying a number from an old article.
Interest and your overall tax position
FD interest is added to the rest of your taxable income under the regime and taxpayer circumstances that apply to you. Your final liability can therefore differ from the TDS deducted. Review salary, pension, business income, capital gains, deductions, advance tax and any other income together before deciding whether more tax is payable or a refund is due.
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Check eligibility for the current assessment year
Return-form eligibility is conditional. Official materials discuss simpler forms and ITR-2 with different restrictions. For example, the department’s salaried-individual guidance limits ITR-1 eligibility where section 112A gains exceed ₹1.25 lakh. That does not mean every investor with any gain must file ITR-2, nor that the threshold is a general exemption. Read the current AY 2026–27 eligibility instructions alongside your income types, residency, ownership and transaction details.
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Documents checklist
- Broker’s annual capital-gain statement and transaction-level contract notes.
- Purchase records showing cost and dates for shares and any gold asset sold.
- Bank passbook or statements, FD receipts and an interest certificate.
- Form 16A for any FD or other interest on which TDS was deducted.
- Form 26AS and AIS, checked against your own records.
- Details of advance tax, self-assessment tax, refunds and carried-forward information where relevant.
Filing sequence
- Choose the assessment year that matches the financial year in which the income arose.
- Download the current return utility and eligibility instructions from the Income Tax Department.
- Enter FD interest under the appropriate income-from-other-sources section.
- Enter each class of capital gain in the applicable schedule, preserving the transaction dates and asset classification.
- Reconcile TDS and other tax credits with Form 26AS and AIS before submitting.
- Review the computation for rate category, surcharge, cess, exemptions, losses and regime selection, then verify the return.
Common mistakes and how to correct them
Using the stock rate for every investment
Applying 20% or 12.5% to an asset without confirming section 111A or 112A eligibility is a classification error. Recheck the security type, exchange and transaction conditions and the law for the relevant date.
Treating TDS as the complete FD tax
A bank may deduct too much or too little compared with your final liability. Report the interest, claim only the credit actually supported by Form 16A and Form 26AS/AIS, and pay any balance or claim a refund through the return.
Assuming a gold rule from an old article
Legacy holding periods and rates may not govern a later disposal or a different gold product. Rebuild the classification from the asset documents and current-year instructions.
Filing without reconciling statements
Differences between a broker statement, bank certificate, AIS and your own ledger can lead to notices or an incorrect credit claim. Resolve mismatches before filing and keep the supporting records for the applicable retention period.
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For every item, answer six questions in order: What asset or instrument was it? What event created income? Which acquisition and disposal dates apply? Does a special rate or exemption provision cover it? Which records support the amount and tax credit? Which return form and tax regime are available for your facts in the current assessment year? This framework keeps share gains, gold disposals and FD interest separate until the point where your total tax is calculated.
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