Short-Term Capital Gain (STCG)

What is Short-Term Capital Gain?

Short-Term Capital Gain (STCG) is the profit that comes from selling the assets within a short duration. Example: You purchase certain shares or bonds at a price and sell those shares at a higher price than that. The money you earn is considered a gain. In India, if you sell shares within 12 months, then they will be considered as STCG.

The short-term capital gain tax rate is 20% under Section 111A of the Income Tax Act. For the other types of assets, short-term capital gain tax is dependent on the income slab. Having a good understanding of the STCG can help you manage taxes more effectively and plan investments wisely.

Calculating Short-Term Capital Gains

You can use the short-term capital gains tax calculator available online on many websites. There is also a formula to find out the STCG. You can calculate it by writing the selling price, then subtracting the purchase price and any other extra costs like transaction fees or brokerage.

The formula for STCG is:

STCG = Selling price - (purchase price + Brokerage + other extra costs)

Understanding STCG Tax Rates in India

If you understand the short-term capital gain tax rate in India, then it will help you in managing your investments in a better way. The tax rate is dependent on the type of asset and when you sell it.

Here is a table to provide a better understanding of the tax rate changes for listed equity shares and mutual funds. It also contains the information about the tax rates for the other assets, like property, land, etc.