What Is the STCG Tax for the Real Estate?

The short-term capital gains tax on real estate means the tax imposed on the profit earned from the sale of property that has held for less than 24 months. The gains are then added to the taxpayer's total income and taxed at the applicable slab rates.

How Are Short-Term Capital Gains Taxed in India for NRIs?

The short-term capital gains taxation for NRIs in India is similar to that of an Indian resident. For section 111A assets, the tax rate is 20%; for other assets, it is the applicable slab rate of the individual.

How to Avoid Short-Term Capital Gain Tax?

When you invest for a year, it qualifies for the lower long-term capital gains tax rate, helping you avoid the higher short-term capital gains tax. Alternatively, to lower the short-term capital gains tax rate, you must balance gains with losses from other investments in the same tax year to reduce your overall tax liability.

What Is the Short-Term Capital Gains Tax on US Stocks?

As an NRI or indian resident, if you own US stocks for less than 24 months, then they qualify as short-term capital gains and are taxed at your applicable income rate based on the tax regime you choose.

What Is the Rate of Short-Term Capital Gain 111A?

Under section 111A of the Income Tax Act, the rate of short-term capital gains is 20%.

NRI Income Tax & Compliance

Short Term Capital Gain on Shares (Section 111A of Income Tax Act) - STCG Tax Rate and Calculation

April 2, 2026
3 mins
9.6K Views

Short-term capital gain (STCG) is the profit earned from selling capital assets held for a short duration. The duration is generally less than 12 months for equity mutual funds/listed equity shares and less than 24 months for other capital assets.

In this blog post, we will explore the key aspects of short-term capital gains, including calculations, tax rates, exemptions, and more.

Key Takeaways

There are no indexation benefits available on short-term capital gains.
The capital gains exemption for short-term capital gains is limited.
Except for NRIs, there are no TDS implications for short-term capital gains.

What Is Short-Term Capital Gains ( STCG )?

The classification of capital gains depends on the holding period of the assets: short-term or long-term. Here, specifically, short-term capital gains (STCG) refer to the profit from selling capital assets held for 24 months or (12 months for equity-oriented mutual funds and listed equity shares).

Please note that indexation benefits on short-term capital gains are not available.

Short-Term Capital Gains Tax Rate

The capital gains tax rate varies depending on the type of asset being sold. However, the short-term interest rate applicable to different asset types is as follows.

The Type Of Asset	Short-Term Capital Gains ( STCG ) Taxation	The Tax Rate
The asset type: Equity-oriented mutual funds, listed equity shares.	Taxed under section 111A of the Income Tax Act ( if STT is paid )	20%
The other assets ( for example, real estate, Land, Unlisted Shares).	Taxed as per normal slab rates.	Slab rates.

However, according to the Budge 2024, which came into effect from 23 July 2024, the short-term capital gain tax on listed shares in India is taxed at a flat rate of 20%. Whereas short-term capital gains on other shares and properties are taxed at applicable slab rates.

What Are Short-Term Capital Assets?

Capital assets are categorised as long-term or short-term based on their holding period. The following table shows the holding periods for different types of capital assets, indicating whether they are classified as long-term or short-term assets. Henceforth, before doing any tax planning regarding any asset, consider this table.

Asset Type	Period of holding for the determination of short-term and long-term.
Listed Equity Shares Equity-Oriented Funds Units of business trust Zero-Coupon Bond	Up to 12 months = STCG More than 12 months = LTCG
Unlisted Share Land or Building	Up to 24 months = STCG More than 24 months = LTCG
Other Assets	Up to 24 months = STCG More than 24 Months = LTCG

How To Calculate Short Term Capital Gain ( STCG)

The short-term capital gain for any capital assets can be calculated as follows.

The particulars	Amount
Full value of consideration	xxx
Less: Expenses incurred wholly and exclusively for such transfer	( xxx )
Net sale consideration	xxx
Less: Cost of acquisition	xxx
Less: Cost of improvement	xxx
Short-term capital gains ( STCG )	xxx
Less: Exemptions under section 54B/54D	xxx
Short-term capital gains are chargeable to tax	xxx

Exemption On Short-Term Capital Gains

The following are the exemptions on short-term capital gains:

The short-term capital gain exemptions are under Section 54B and Section 54D of the Income Tax Act.
Section 54B of the Income Tax Act is applicable to gains from the sale of agricultural land used for the purpose of agriculture, provided that the sale proceeds are reinvested in another agricultural land.
Likewise, section 54D applies to gains from the sale of industrial land or buildings used for industrial purposes, allowing reinvestment in another industrial property to avail of the tax exemptions.
These tax provisions are designed to encourage reinvestment in the specific asset categories, thereby managing the tax impact on the capital gains.

The Example of Short-Term Capital Gain

Mr Abhilash bought a house in 2025 for around Rs 20 lakhs. He then sold the house in 2026 for Rs 65,00,000. Here's how you can calculate the tax on capital gains.

Particualrts	Amount
Full value of the sale consideration	Rs 65,00,000
Less: Expense incurred wholly and exclusively for such transfer	Nil
Net sale consideration	65,00,000
Less: Cost of acquisition	20,00,000
Less: Cost of improvement	Nil
STCG	45,00,000
Less: exemption under section 54B/54D	Nil
Short-term capital gains are chargeable to tax	45,00,000

The Comparison Between STCG Tax Rates With The Preceding Year

The following table compares the short-term capital gains tax rate, holding period, and other differences related to short-term capital gains.

Category	Previous Provisions	Current Provisions
Equity-oriented mutual funds ( STT) hold and list equity shares.	STCG is taxed at 15% under section 111A.	STCG u/s 111A now getting taxed at 20%.
Secified mutual funds ( acquired after 1 April 2023)	Here, always consider capital gains; however, long-term and short-term capital gains are based on the holding period.	Always, short-term capital gains, regardless of holding period, are taxed at slab rates.
Market-linked debentures ( MLD )	Taxed as short-term capital gains regardless of the holding periods of the asset. It was introduced in the Finance Act 2023.	MLI amendment reinforced classification: Always, short-term capital gains are taxed at the slab rates.
Definition of the specific mutual funds.	MF with < 35% equity exposure under the pre 2023 rules.	MFs where >65% assets in MMA/debt, or fund-of-funds investing, similarly ( according to the new definition)

Short-Term Capital Gain Tax Implications for NRIs

In the case of non resident indian, the listed equity shares and equity-related mutual funds are taxed at 20% under section 111A of the Income Tax Act, similar to that of Indian residents.

Whereas other capital assets, such as property, unlisted shares, and so on, are taxed at your applicable tax rates.

TDS ( Tax Deducted At Source )

Non-resident individuals in Indiana are subject to mandatory TDS on short-term capital gains.

Listed equity and equity funds: TDs at 20% ( plus cess and surcharge ).
Other assets: TDS at slab rates applicable to the taxpayer. The buyer or the deductors must ensure that they deduct the TDS under section 195 and duly deposit it with the Indian tax authorities.

Important Pointers For NRIs To Consider

The benefits of exhaustion of the basic exemption limit under section 111A of the Income Tax Act for the short-term capital gains of the equity-oriented funds and the listed shares are not available to the non-resident.
For NRIs, TDS is compulsory on short-term capital gains.
NRIs must claim the double taxation benefit as per the applicable DTAAs.

The Bottom Line

The taxation of short-term capital gains depends on the type of capital asset and your residential status, that is, whether you are an NRI or a Resident Indian. Under section 111A, listed equities and mutual funds are taxed at 20% flat, whereas other capital assets are taxed as per the applicable slab rates.

Specifically, NRIs have to be very careful with DTAA planning and TDS deduction compliance to optimize their tax outcomes.

It is usually advisable for NRIs to seek professional assistance for short-term capital gains taxation. And when it comes to NRI professional assistance in NRI investment options, taxation, and finance, Savetaxs is the name to trust. We have been helping NRIs from 90+ countries with their capital gains taxation, whether short- or long-term, ensuring everything is error-free and in compliance to avoid adverse consequences.

Connect with us as we trust our clients 24/7 across all time zones.

Disclaimer

Note: This guide is for information purposes only. The views expressed in this guide are personal and do not constitute the views of Savetaxs. Savetaxs or the author will not be responsible for any direct or indirect loss incurred by the reader for taking any decision based on the information or the contents. It is advisable to consult either a CA, CS, CPA or a professional tax expert from the Savetaxs team, as they are familiar with the current regulations and help you make accurate decisions and maintain accuracy throughout the whole process.

Manish Prajapat(Tax Expert)

Mr Manish is a financial professional with over 10 years of experience in strategic financial planning, performance analysis, and compliance across different sectors, including Agriculture, Pharma, Manufacturing, & Oil and Gas. Mr Prajapati has a knack for managing financial accounts, driving business growth by optimizing cost efficiency and regulatory compliance. Additionally, he has expertise in developing financial models, preparing detailed cash flow statements, and closing the balance sheets.

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Frequently Asked Questions

Yes, NRIs must pay short-term capital gains on Indian stocks, and TDS will also be deducted.

For the listed securities, the term period is 12 months, whereas for other assets, it is 24 months to qualify as short-term assets.

Capital gains earned from debt mutual funds that were purchased either on or before April 1st, 2023, are categorised as short-term capital regardless of their holding periods. Capital gains from debt mutual funds purchased before 1st April 2023 will be classified as short-term or long-term based on their holding period.

The capital gains from the depreciable assets are always classified as short-term capital gains, irrespective of their holding period.

Irrespective of the classification, the tax rate for the crypto is 30%.