What are Short-Term Capital Gains (STCG)?#
Short-Term Capital Gains (STCG) are profits from selling capital assets that have been held for less than the qualifying long-term holding period. They are typically taxed at higher rates than long-term capital gains (LTCG).
Holding Periods: When is a Gain "Short-Term"?#
| Asset Type | STCG if Held ≤ |
|---|---|
| Listed equity shares, equity MFs | 12 months |
| Unlisted shares | 24 months |
| Immovable property | 24 months |
| Listed bonds | 12 months |
| Gold, other assets | 24 months |
STCG Tax Rates (AY 2026-27)#
| Asset Type | STCG Tax Rate | Section |
|---|---|---|
| Listed equity shares / equity MFs (STT paid) | 20% | 111A |
| Unlisted shares | As per slab rate | Normal |
| Immovable property | As per slab rate | Normal |
| Debt MFs, Gold, Bonds | As per slab rate | Normal |
| F&O (Futures & Options) | As per slab rate (business income) | — |
Note: Budget 2024 raised STCG on equity from 15% to 20%, effective July 23, 2024.
STCG on Equity — Practical Impact#
For equity shares and equity mutual funds bought and sold within 12 months:
- Tax = 20% of gains (if STT was paid on the transaction)
- No exemption threshold (unlike LTCG's ₹1.25L exemption)
- Added to your income but taxed at flat 20%, not slab rate
STCG Added to Total Income (Slab Rate Assets)#
For most other assets (property, gold, debt MFs, unlisted shares), STCG is added to your total income and taxed at your applicable slab rate. This means:
- If you're in the 30% bracket, STCG on property sale is taxed at 30%
- If you're in the 5% bracket, STCG on a small property sale is taxed at 5%
Loss Set-Off Rules#
Short-term capital loss can be set off against:
- ✅ Short-term capital gains (any asset)
- ✅ Long-term capital gains (any asset)
Long-term capital loss can only be set off against:
- ✅ Long-term capital gains only
Unabsorbed capital losses can be carried forward for 8 years.
How to Report STCG in ITR#
- Use ITR-2 (if no business income)
- In Schedule CG, enter STCG in the relevant sections:
- Section 111A: Listed equity STCG (20%)
- Other STCG: For assets taxed at slab rates
- Include transaction costs (brokerage, STT) to reduce gains