What is Short-Term Capital Gains (STCG) Tax?
If you buy listed equity shares and sell them within 12 months, any profit you make is considered a Short-Term Capital Gain (STCG). The income tax department taxes these quick profits differently than your regular salary.
In plain English: STCG just means a "quick profit" the taxman treats separately from your salary. For listed equity shares and equity-oriented mutual funds (where Securities Transaction Tax, or STT, is paid), the STCG tax rate is a flat 20% (plus health and education cess at 4%).
Quick stat: STCG under Section 111A rose from 15% to 20% for shares sold on or after 23 July 2024 (Source: Finance (No. 2) Act, 2024).
| Listed equity STCG | Tax rate |
|---|---|
| Sold before 23 Jul 2024 | 15% + 4% cess |
| Sold on or after 23 Jul 2024 | 20% + 4% cess |
How to Calculate STCG
Calculating STCG is straightforward: STCG = Sale Value - (Purchase Price + Transfer Expenses)
Transfer expenses include brokerage charges, but you cannot deduct STT (Securities Transaction Tax) from your capital gains.
Example: - You bought 100 shares of XYZ Ltd. at ₹1,000 each (Total: ₹1,00,000). - You sold them 6 months later at ₹1,200 each (Total: ₹1,20,000). - Brokerage paid on sale: ₹200. - Your STCG = ₹1,20,000 - (₹1,00,000 + ₹200) = ₹19,800. - Tax payable = 20% of ₹19,800 = ₹3,960 (plus 4% cess).
Reporting STCG in your ITR
When you have capital gains from selling shares, you cannot use the simple ITR-1 form. You must file ITR-2 (or ITR-3 if you also have business income).
You need to report these gains in the Schedule CG (Capital Gains) of your ITR.
How LastMinute ITR helps Manually entering every single trade into the tax portal is a nightmare. With LastMinute ITR, you can simply upload your broker's Tax P&L statement. We automatically calculate your STCG, separate it from your long-term gains, and prepare the exact figures you need to enter on incometax.gov.in.
Can you set off Short-Term Capital Losses?
Yes! If you made a loss on some shares sold within 12 months, you can use that Short-Term Capital Loss (STCL) to reduce your tax burden. - STCL can be set off against both Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG). - If you can't set off the entire loss this year, you can carry it forward for the next 8 assessment years, provided you file your ITR before the deadline.
What you should do
- Download your broker Tax P&L (Zerodha Console, Groww reports) and your AIS in the same sitting.
- Confirm whether each sale is before or after 23 Jul 2024, since the rate changed mid-year.
- Switch to ITR-2 early if you sold any shares, then enter Schedule CG figures.
Common mistake
Deducting STT from your gains. STT paid on the trade is not an allowed deduction for STCG. Only your buy cost and brokerage reduce the gain. Many filers shave off STT and under-report tax.
How LastMinute ITR helps
Upload your broker statement and we split STCG from LTCG, flag pre/post 23 Jul 2024 trades, and prepare clean Schedule CG figures for incometax.gov.in.
Start with LastMinute ITR · import your broker statement · fix an AIS mismatch.
Remember: Always reconcile your broker's statement with your AIS (Annual Information Statement) before filing to avoid tax notices.