What Is Short Term Capital Gains Tax?
5paisa Research Team
Last Updated: 10 Jun, 2025 10:33 AM IST

Content
- What is Short-Term Capital Gains Tax on Shares?
- Understanding the STCG Tax Rate in India
- STCG Tax on Different Types of Investments
- How to Save Tax on Short-Term Capital Gains?
- Compliance and Filing of STCG Tax
- Final Thoughts
In India, investing in the stock market has gained immense traction among both individual investors and businesses. With the rise in equity investments, understanding the short-term capital gains tax on shares is crucial for ensuring tax compliance and maximising returns.
Whether you are an intraday trader, a long-term investor dabbling in short-term trades, or a corporate entity investing in equities, you need to be aware of how short-term capital gains tax (STCG) works, its impact on your financial planning, and the tax-saving opportunities available.
If you have ever wondered how short-term capital gains tax in India is structured, what the STCG tax rate is, or how it applies to different types of equity transactions, this detailed guide will provide you with an in-depth understanding of everything you need to know.
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer please Click here.
Frequently Asked Questions
The benefit of indexation is not available on short-term capital gain tax. It is only applicable for long-term capital gains.
Short-term capital gain is not subject to tax exemption. However, STCG tax other than under Section 111A is taxable as per slab rates. The overall income in such a case is subject to a basic exemption limit.
The short-term capital gain for equity investments is fifteen per cent.
It is difficult to avoid short-term capital gain tax altogether. You can either set it off against a short-term capital loss or carry it forward to the next financial year(s).
The difference between short-term and long-term capital gain is the period of holding.
The period of thirty-six months is not standard for all assets. For example, shares held for more than twelve months are long-term capital assets, whereas the holding period for house property is twenty-four months.
Yes, an NRI is liable to pay taxes on gains made on the property’s sale in India. However, it is subject to deduction and exemptions.
Short-term capital loss can only be offset by short-term and long-term capital gain. You cannot offset it against any other income head. Also, you may carry forward the total or partial short-term capital loss if it cannot be adjusted.
The long-term capital gain tax on the sale of house property is twenty per cent.