STCG
Definition
Short Term Capital Gains — profit from selling assets held for less than the specified period. STCG on equity (held < 12 months): taxed at 15%. STCG on property (held < 24 months): taxed as per income tax slab.
Why is STCG Important?
Navigating the Indian tax system requires a clear understanding of terms like STCG. With the introduction of the new income tax regime alongside the old one, taxpayers must evaluate their deductions, exemptions, and tax brackets carefully. This concept is a key component in optimizing your tax liabilities under the Income Tax Act and GST framework.
Proper tax planning using this metric can help individuals and businesses maximize their take-home income while remaining fully compliant with government regulations. We provide free tax calculators to help you estimate these figures accurately and make informed decisions before filing your returns.
What is STCG?
Short-Term Capital Gains (STCG) is the profit earned from selling a capital asset held for a short duration. The holding period that qualifies as "short-term" varies by asset type.
Short-Term Holding Periods
| Asset Type | Short-Term If Held For | STCG Tax Rate |
|---|---|---|
| Listed Equity Shares | Less than 12 months | 20% (flat) |
| Equity Mutual Funds | Less than 12 months | 20% (flat) |
| Debt Mutual Funds | Less than 24 months | As per income tax slab |
| Real Estate | Less than 24 months | As per income tax slab |
| Gold/Jewellery | Less than 24 months | As per income tax slab |
STCG vs. LTCG (Listed Equity)
| Feature | STCG | LTCG |
|---|---|---|
| Holding period | < 12 months | ≥ 12 months |
| Tax rate | 20% | 12.5% (above ₹1.25L exemption) |
| Exemption | None | ₹1.25 lakh/year |