Short-Term Capital Gain on Shares

What is short term capital tax on shares?

Short-term capital gain tax is applicable on the profit earned from selling equity shares or equity oriented mutual funds units within 12 months. A tax rate of 20% is applicable on the amount earned after deducting the expenses incurred. Section 111A refers to the taxation of short-term capital gains on listed equity shares.

Assets on which short term capital gain tax is levied

Following are the assets on which short term capital gain tax is applicable,

Equity shares of listed company

STCG tax is applicable on the profit generated from selling equity shares of a company listed on the Indian stock exchanges.

Equity-oriented funds

When you sell your equity-oriented mutual fund units, the profit earned is taxed under STCG.

Zero-coupon bonds

Zero-coupon bonds have maturities ranging from 10-15 years, if the bondholder can sell the bond before maturity. Zero-coupon bonds sold within 12 months are eligible to be taxed as short-term capital gains.

How to calculate short-term capital gain tax?

Here's how short-term capital gain tax is calculated.

Short-term Capital Gain Tax Vs Long-term Capital Gain Tax

Here are the key differences between Short-term and Long-term capital gain tax,