When filing income tax returns for the last financial year, the declaration of any capital gains income warrants careful scrutiny, given the several changes in tax rules in recent years. Mistakes or omissions in reporting capital gains get easily captured by the tax authorities, which now cross-check your return against broker statements, mutual fund reports, the Annual Information Statement (AIS), Form 26AS and other thirdparty data. Here is everything you need to know about declaring capital gains.Which ITR form to useFirst, make sure you file your income using the correct form. If you have long-term capital gains (LTCG) in excess of Rs.1.25 lakh, ITR-1 cannot be used. If your long-term equity capital gains for 2025-26 are below the Rs.1.25 lakh exemption threshold, with no loss to carry forward, you can use ITR-1. Individuals with salary or other income and capital gains in excess of Rs.1.25 lakh, but no business or professional income, must use ITR-2. Individuals with business or professional income alongside capital gains must file under ITR-3. Individuals with gains from futures and options (F&O) trading must report them under this form, as such income is treated as business income.ALSO READ | ITR filing: How Bitcoin, NFTs, airdrops, gifted crypto, and overseas wallets are taxed in India and how to report themFile under the correct sectionAll disclosure of capital gains must be filed in Schedule CG. This schedule houses separate sections for different types of gains. For accurate tax liability computation, you must file under the relevant sections only. For example, if you enter LTCG from equity under Section 112 instead of 112A, you will miss the Rs.1.25 lakh exemption that applies to this gain under the latter.Further, different assets have different holding periods and tax rates. While reporting capital gains, make sure you split them into short-term and long-term gains. Don’t club everything together. Alok Agrawal, Partner, Deloitte India, says, “Whether a gain is treated as short-term or long-term depends on how long you held the asset. A simple mistake in calculating the holding period can lead to the wrong tax being paid.”For each instrument, disclose the acquisition and sale dates, cost of acquisition, and sale consideration. Older equity investments may require grandfathering of cost under applicable tax rules. For shares bought before 1 February 2018, your cost is the higher of the actual cost or the lower of the fair value on 31 January 2018 and the sale price. This provision protects older gains. Do not blindly report the gains mentioned in your broker’s statement, without checking whether grandfathering has been correctly applied.Be mindful of new tax provisionsWhen the capital gains framework was overhauled in July 2024, taxpayers had to split and report their gains into two separate date buckets for gains before and after 23 July 2024. This split-year reporting of capital gains is now removed, points out Amit Maheshwari, Managing Partner, AKM Global. Now, a single, uniform rate applies to the whole financial year. A uniform LTCG tax rate of 12.5% now applies for any asset sales in the last year. For listed shares and equity mutual funds, gains on investments held for more than 12 months are taxed as LTCG. For property, physical gold and most other unlisted assets, gains generally qualify as long-term if the asset is held for more than 24 months.Note that the indexation benefit on sale of properties acquired on or after 23 July 2024 was removed. These get taxed at a flat rate of 12.5% without indexation. However, for properties acquired before July 23, 2024, taxpayers can opt for the old tax rate of 20% with indexation if it results in a lower tax liability.ALSO READ | ITR filing 2026: Foreign income and overseas assets? Avoid these 7 costly disclosure mistakesAlso note that from 1 April 2025, Gold ETFs, Silver ETFs, and Overseas Fund of Funds are no longer classified as Specified Mutual Funds. These are now subject to LTCG at 12.5% with a 12-month holding period threshold (24 months for overseas FoF), and not at slab rates for any holding period. Irrespective of the holding period, gains on debt funds acquired on or after 1 April 2023 are taxed at slab rates.How capital gains are taxed now