STCG Tax — Short Term Capital Gains Tax Rates 2025-26 | TaxClue

STCG Tax — Short Term Capital Gains Tax on Shares & Assets 2025-26

Q: What is the STCG tax rate on shares for 2025-26?

For listed equity shares and equity-oriented mutual funds held for less than 12 months, STCG is taxed at 20% under Section 111A (revised in Budget 2024, effective 23 July 2024 — previously 15%). STT must have been paid on the transaction for this rate to apply. For shares bought before 23 July 2024, the rate was 15% up to that date and 20% thereafter.

Q: Can STCG be set off against LTCG?

STCG under Section 111A (equity/equity MF) can only be set off against STCG under 111A — it cannot be set off against LTCG. However, STCG arising from other assets (property, debt MF, gold) taxed at slab rates can be set off against any capital gains — short or long term. Unabsorbed STCG losses can be carried forward for 8 assessment years.

Q: Does the Section 87A rebate apply to STCG under Section 111A?

No. After Budget 2023 clarification, the Section 87A tax rebate (up to ₹12,500 for income up to ₹5 lakh under old regime, or ₹25,000 for income up to ₹7 lakh under new regime) does NOT apply to STCG under Section 111A or LTCG under Section 112A. The rebate only applies to income taxed at normal slab rates, not to special-rate capital gains.

Q: What is the STCG tax on mutual fund redemption?

It depends on the type of fund: Equity mutual funds (≥65% equity) held < 12 months: STCG taxed at 20% (Section 111A, STT applicable). Debt mutual funds (purchased after 1 April 2023) and hybrid funds with < 65% equity: gains added to income and taxed at your income tax slab rate — no indexation benefit. Gold funds/ETFs held < 36 months: taxed at slab rates.

Q: How do I report STCG in ITR?

STCG is reported in Schedule CG (Capital Gains) of ITR-2 or ITR-3. STCG under Section 111A goes in "Short-term capital gains on equity shares/units on which STT is paid." Other STCG goes in the appropriate sub-section based on asset type. If you have only salary + STCG and no business income, use ITR-2. Details like purchase date, sale date, sale consideration, and cost of acquisition must be entered for each transaction (or as a consolidated figure from broker's capital gains statement).

Last updated: 3 June 2026

What is STCG Tax? Short Term Capital Gains (STCG) tax applies when you sell a capital asset within its short-term holding period. For listed equity shares and equity mutual funds held for less than 12 months, STCG is taxed at 20% under Section 111A (Budget 2024 revision — was 15% until 22 July 2024). STT (Securities Transaction Tax) must be paid on the transaction for this special rate. For other assets — residential property held < 24 months, debt mutual funds, gold — STCG is added to your income and taxed at your applicable slab rate.

20%

STCG on listed equity shares and equity mutual funds (Budget 2024, effective 23 July 2024). Previously 15%. LTCG on the same assets beyond ₹1.25 lakh is taxed at 12.5% (Section 112A).

STCG Tax Rates for All Asset Types — AY 2026-27

Asset Type	Short-Term Holding Period	STCG Tax Rate	Section
Listed equity shares (BSE/NSE)	Less than 12 months	20%	111A
Equity-oriented mutual funds (≥65% equity)	Less than 12 months	20%	111A
Debt mutual funds (purchased after 1 Apr 2023)	Any holding period	Slab rate	Normal income
Hybrid funds (<65% equity)	Less than 36 months	Slab rate	Normal income
Residential / commercial property	Less than 24 months	Slab rate	Normal income
Physical gold / gold ETF / gold MF	Less than 24 months	Slab rate	Normal income
Unlisted equity shares	Less than 24 months	Slab rate	Normal income
Bonds & debentures (listed)	Less than 12 months	Slab rate	Normal income

Note: STT (Securities Transaction Tax) must be paid at the time of sale for the 20% Section 111A rate to apply on equity shares and equity MF. Off-market transactions do not qualify.

STCG vs LTCG — Quick Comparison

Parameter	STCG (Equity Shares)	LTCG (Equity Shares)
Holding Period	Less than 12 months	12 months or more
Tax Rate	20% (Section 111A)	12.5% above ₹1.25 lakh (Section 112A)
Basic Exemption Benefit	No (special rate)	First ₹1.25 lakh exempt per year
87A Rebate	Not applicable	Not applicable
Indexation	Not available	Not available (equity/equity MF)
Set-off	Against STCG only (111A)	Against LTCG only
Carry Forward	8 years	8 years
ITR Form	ITR-2 or ITR-3	ITR-2 or ITR-3

STCG on F&O Trading — Important Distinction

F&O (Futures & Options) trading is not treated as capital gains at all — it is classified as non-speculative business income under Section 43(5) of the Income Tax Act. This means:

F&O profits are taxed at your normal income tax slab rates, not at the 20% STCG rate.
F&O losses can be set off against any business income and carried forward for 8 years.
F&O traders must file ITR-3 (not ITR-2), as it is business income.
A tax audit under Section 44AB is required if F&O turnover exceeds ₹10 Cr, or if you declare a loss and turnover is above ₹2 Cr without audit.
F&O turnover is calculated as the absolute value of all profits and losses (not the notional contract value).

Frequently Asked Questions

What is the STCG tax rate on shares for 2025-26?

For listed equity shares and equity-oriented mutual funds held for less than 12 months, STCG is taxed at 20% under Section 111A (revised in Budget 2024, effective 23 July 2024 — previously 15%). STT must have been paid on the transaction for this rate to apply. For shares bought before 23 July 2024, the rate was 15% up to that date and 20% thereafter.

Can STCG be set off against LTCG?

STCG under Section 111A (equity/equity MF) can only be set off against STCG under 111A — it cannot be set off against LTCG. However, STCG arising from other assets (property, debt MF, gold) taxed at slab rates can be set off against any capital gains — short or long term. Unabsorbed STCG losses can be carried forward for 8 assessment years.

Does the Section 87A rebate apply to STCG under Section 111A?

No. After Budget 2023 clarification, the Section 87A tax rebate (up to ₹12,500 for income up to ₹5 lakh under old regime, or ₹25,000 for income up to ₹7 lakh under new regime) does NOT apply to STCG under Section 111A or LTCG under Section 112A. The rebate only applies to income taxed at normal slab rates, not to special-rate capital gains.

What is the STCG tax on mutual fund redemption?

It depends on the type of fund: Equity mutual funds (≥65% equity) held < 12 months: STCG taxed at 20% (Section 111A, STT applicable). Debt mutual funds (purchased after 1 April 2023) and hybrid funds with < 65% equity: gains added to income and taxed at your income tax slab rate — no indexation benefit. Gold funds/ETFs held < 36 months: taxed at slab rates.

How do I report STCG in ITR?

STCG is reported in Schedule CG (Capital Gains) of ITR-2 or ITR-3. STCG under Section 111A goes in "Short-term capital gains on equity shares/units on which STT is paid." Other STCG goes in the appropriate sub-section based on asset type. If you have only salary + STCG and no business income, use ITR-2. Details like purchase date, sale date, sale consideration, and cost of acquisition must be entered for each transaction (or as a consolidated figure from broker's capital gains statement).

Stcg Tax Near You

Expert CA/CS assistance for stcg tax across India. Click your city for local details.

→ New Delhi → Mumbai → Bengaluru (Bangalore) → Hyderabad → Chennai → Kolkata → Pune → Ahmedabad → Noida (UP) → Gurgaon (Gurugram) → Jaipur → Lucknow → Chandigarh → Surat → Kochi (Cochin) → Faridabad → Ghaziabad → Greater Noida → Panipat → Sonipat → Manesar (IMT) → Dharuhera → Mathura → Palwal → Agra → Kosi Kalan → Aligarh → Khair → Jewar (Noida International Airport) → Kanpur → Varanasi (Kashi) → Prayagraj (Allahabad) → Meerut → Bareilly → Moradabad → Gorakhpur → Firozabad → Saharanpur → Muzaffarnagar → Bulandshahr → Hapur → Karnal → Kurukshetra → Ambala → Hisar → Rohtak → Yamunanagar → Rewari → Bhiwani → Jodhpur → Udaipur → Kota → Ajmer → Bikaner → Ludhiana → Amritsar → Jalandhar → Patiala → Mohali (SAS Nagar) → Bathinda → Dehradun → Haridwar → Rudrapur → Shimla → Solan (Baddi-Barotiwala-Nalagarh) → Bhopal → Indore → Gwalior → Jammu → Srinagar → Panchkula

Ask Veda