STCG: Short-Term Capital Gains Tax in India
STCG (Short-Term Capital Gains) is the tax on profits from sale of capital assets held shorter than the prescribed holding period, with rates varying by asset class under the Income Tax Act 1961.
Holding periods (post Finance Act 2024, effective July 23, 2024) — assets held BELOW these thresholds = STCG: listed equity shares, equity mutual funds, business trusts → less than 12 months. Unlisted shares, immovable property, gold, debt mutual funds → less than 24 months. Other listed securities → less than 12 months.
Tax rates (FY 2025-26 onwards): listed equity / equity MFs / business trusts (STT-paid) → 20% (increased from 15% effective July 23, 2024). All other STCG (debt MFs, gold, property, unlisted shares, foreign assets) → added to taxable income and taxed at slab rate (5%/20%/30%/etc.). Surcharge and 4% Health and Education Cess apply on top.
Loss treatment: short-term capital losses can be set off against both STCG and LTCG of the same FY. Losses not fully set off can be carried forward for 8 assessment years, but only against future capital gains (not against salary or business income). Returns must be filed within the due date to claim carry-forward — late filing forfeits carry-forward right.
Richify Tip
Equity STCG rate jump from 15% to 20% in July 2024 is significant for active traders. For debt MFs purchased after April 1, 2023, all gains regardless of holding period are taxed at slab rate (no LTCG benefit) per Finance Act 2023 — these became STCG-equivalent for taxation purposes.
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