STCG (Short-Term Capital Gains)
Definition
Tax on gains from selling assets held for short periods, taxed at flat rates for equities or ordinary slabs for other assets.
Key Takeaways
- STCG arises from selling assets held for 12 months or less (equity) or 24 months or less (other assets).
- Equity STCG taxed at flat 20% rate under Section 111A, regardless of income bracket.
- Other assets' STCG taxed at your applicable income tax slab rate (up to 30%).
- No exemption limit for STCG; entire gain is taxable.
Detailed Explanation
Short-Term Capital Gains (STCG) is the profit realized from selling capital assets held for a short period. For listed equity shares and equity-oriented mutual funds, the holding period is 12 months or less. For other assets like real estate, gold, and debt mutual funds, the holding period is 24 months or less.
Under Section 111A, STCG from listed equity shares and equity mutual funds is taxed at a flat rate of 20%, regardless of your income tax slab. For other assets like property, gold, and debt funds, STCG is taxed as per your applicable income tax slab rate (which can range from 0% to 30% plus surcharge and cess). STCG tax applies to both Old and New Tax Regimes and there is no exemption limit.