Short Term Capital Gains Tax: How much STCG on Share is Tax-Free?

Short-Term Capital Gain are the profits which arises when you sell a capital asset (such as stocks, mutual funds, or property) within a short holding period at a profit.

Short Term Capital Gain Tax Rate

Under Old Tax Regime

In old tax regime, if overall income after all deduction and exemption is up to ₹5 lakh then rebate u/s 87A is available amounting ₹12,500. This rebate is also available for STCG.

If income is only from STCG then,

Sold	Tax Rate
23.07.24 Onwards	20%
Up to 22.07.24	15%

Under New Tax Regime

In new tax regime overall income after all deduction and exemption is up to 7,00,000 then Rebate u/s 87A is available amounting ₹25,000.

But this rebate is not available for STCG for any special rate incomes.

If income is only from STCG then,

Sold	Tax Rate
23.07.24 Onwards	20%
Up to 22.07.24	15%

Note:

If you have any other income such as salary, business or other, then it will be taxable as per the slab rates.

How much short-term capital gain is tax-free?

• In Old Regime – up to ₹2,50,000 is Tax Free.

• In New Regime – up to ₹3,00,000 is Tax Free. It will increase to ₹4 lakh in 2025-26.

For example, if your STCG is ₹3 lakh under new regime and your total income is under the exemption limit then no tax is applicable.

Note:

This limit is the over all income limit including salary, business, capital gain etc.

Short Term Capital Gain Tax on Shares

This occurs when any share purchased as delivery and sold after 1 day and before 12 months.

Short-Term Capital Asset classification

Type of Asset	Holding Period
Listed Equity Shares	Less than 12 months
Unlisted Equity Shares	Less than 24 months

Here,

Listed securities are short-term if held for less than 12 months, while unlisted equity shares are considered as short-term if held for less than 24 months.

Which ITR Form to Choose?

ITR Form	Applicable
ITR-2	If income is only from STCG, salary or other source.
ITR-3	If there is business income including STCG.

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