Deep guide · Tax
Short-term capital gains (STCG) calculator
Buy for ₹₹1,00,000, sell for ₹₹1,50,000, and pay ₹₹5,000 in transfer expenses along the way, and the capital gain works out to ₹45,000. If that gain is short-term on STT-paid listed equity or an equity mutual fund, tax at a commonly cited flat rate comes to roughly ₹6,750, leaving net proceeds of about ₹1,38,250.
The rate and the holding-period threshold that decides “short-term” have both been rewritten in recent Union Budgets, so treat what follows as the current mechanics, not a permanently fixed number — check the figure for your actual financial year before filing.
How the gain is worked out, and what counts as “short-term”
- Capital gain = Sale price − Purchase price − Transfer expenses = ₹150000 − ₹100000 − ₹5000 = ₹45,000.
- Confirm the asset actually falls within its short-term holding-period threshold — this differs by asset class.
- Apply the matching tax treatment: a flat rate for STT-paid listed equity and equity funds, or your income tax slab rate for most other assets.
The threshold that decides “short-term” itself depends on what you sold:
| Asset type | Commonly cited short-term threshold |
|---|---|
| Listed equity shares / equity mutual funds | 12 months or less |
| Debt mutual funds | Rules have changed in recent years — verify current treatment |
| Immovable property (land, buildings) | 24 months or less |
| Unlisted shares | 24 months or less |
These thresholds get revised in Union Budgets too, so an outdated one is an easy way to misclassify a gain — and applying the wrong rate off the back of that mistake is a real filing error, not a rounding difference.
A full worked example
Say an investor bought shares for ₹₹1,00,000, held them 8 months, and sold for ₹₹1,50,000, paying ₹₹5,000 in brokerage and transaction charges along the way.
- Holding period check: 8 months is comfortably inside the 12-month short-term threshold for listed equity.
- Gain: ₹150000 (sale) − ₹100000 (purchase) − ₹5000 (expenses) = ₹45,000.
- Tax at the applicable flat rate for STT-paid equity: ₹45,000 × 15% (illustrative) = ₹6,750.
- Net proceeds: ₹150000 − ₹5000 − ₹6,750 = ₹1,38,250.
A property or debt-fund sale runs the same four steps — only the rate and the holding-period threshold in step 1 and step 3 change, depending on the asset class and the rules in force for that financial year.
Equity, property, and debt aren’t taxed the same way
| Asset class | Typical tax treatment | Key consideration |
|---|---|---|
| STT-paid listed equity / equity mutual funds | Flat rate on short-term gains | Rate has changed in recent budgets — verify current figure |
| Immovable property | Slab rate (added to total income) | Registration and legal costs are typically deductible |
| Debt mutual funds | Rules have changed significantly in recent years | Verify current classification and rate before relying on an old assumption |
| Unlisted shares | Slab rate (added to total income) | Longer short-term threshold (commonly 24 months) than listed equity |
“Short-term capital gains tax” isn't one number — the rate hinges on exactly what you sold, which is why the calculator asks for the asset type before it asks for anything else.
What expenses reduce the taxable gain
- Brokerage and transaction charges paid at the time of sale.
- Securities transaction tax (STT), where applicable and not otherwise creditable.
- For property: registration fees, stamp duty, and legal expenses directly tied to the transfer.
- Any other cost incurred wholly and exclusively in connection with the transfer of the asset.
General ownership costs — routine maintenance, insurance, and the like — aren't deductible in the same way. Only costs tied specifically to the act of transferring the asset reduce the sale consideration; worth confirming with a tax professional if a cost falls in a grey area.
A few situations that change the numbers
- Bonus shares. The acquisition cost is typically treated as nil (or a nominal face value), and the holding period is measured from the date the bonus shares were allotted, not from when the original shares were bought — so bonus shares sold soon after allotment can be short-term even though the original holding was long-term.
- Rights issues. The holding period runs from the date the rights shares were allotted, and the acquisition cost is the amount actually paid to subscribe — usually below the market price at allotment.
- Inherited or gifted assets. The holding period is typically computed by including the previous owner's holding period, and the acquisition cost is generally the cost to the previous owner, rather than the market value on the date of inheritance or gift.
- ESOP shares. The perquisite value already taxed at exercise becomes the cost of acquisition for capital-gains purposes, and the holding period for STCG classification runs from the date of allotment at exercise, not from when the options were originally granted.
Each of these shifts either the acquisition cost or the holding-period start date — getting either input wrong can flip a sale from long-term to short-term classification, or the reverse, and change the tax outcome materially.
Setting off short-term losses
Short-term capital losses can generally be set off against both short-term and long-term capital gains realised in the same financial year. If losses exceed gains, the unabsorbed amount can typically be carried forward for a limited number of subsequent assessment years — but only if the return for the loss year is filed by the due date, a requirement that trips up more filers than the loss calculation itself does.
Short-term now, or wait for long-term treatment?
Reasons to consider holding longer
- Long-term capital gains on equity often carry a lower rate and, historically, an exemption threshold on part of the gain.
- Fewer transactions means lower brokerage and less short-term timing risk.
Reasons a short-term sale can still make sense
- A genuine change in investment thesis or a real liquidity need outweighs a modest tax difference.
- Deliberately realising a short-term loss to offset other gains in the same year.
Tax is one input into a sell decision, not the only one — see the LTCG calculator for what the same sale would look like on the other side of the holding-period line before deciding either way.
Mistakes worth avoiding
- Assuming the same STCG rate applies to every asset class — equity and non-equity assets are typically taxed very differently.
- Forgetting to deduct legitimate transfer expenses before calculating the taxable gain.
- Applying an outdated rate or holding-period threshold after a Union Budget has changed the rules.
- Missing the return filing deadline, which can forfeit the right to carry forward a capital loss.
- Reconciling your own transaction log against the broker or registrar's statement at the last minute instead of well before the deadline.
Key takeaways
- Gain: ₹150000 − ₹100000 − ₹5000 = ₹45,000.
- Illustrative tax at a commonly cited flat rate: about ₹6,750 (verify the current rate).
- STT-paid listed equity/equity funds typically get flat-rate treatment; most other assets use slab rates.
- Transfer-related expenses reduce the taxable gain — routine ownership costs generally don't.
- Short-term losses can offset both short-term and long-term gains in the same year, but only if you file on time.
Frequently asked questions
- What is the STCG tax on selling for ₹₹1,50,000 after buying for ₹₹1,00,000?
- The capital gain is ₹150000 − ₹100000 − ₹5000 (expenses) = ₹45,000. At a commonly cited flat rate for STT-paid listed equity and equity mutual funds, illustrative tax is about ₹6,750 — always verify the exact current rate, since it has changed in recent budgets.
- What counts as a "short-term" capital gain?
- For listed equity shares and equity-oriented mutual funds, holding for 12 months or less before selling classifies the gain as short-term. For most other assets (unlisted shares, debt funds, property, gold), the short-term threshold is typically longer — commonly 24 or 36 months depending on the asset class and current tax rules.
- What tax rate applies to short-term capital gains on listed equity?
- A flat rate has historically applied to STCG on listed equity shares and equity mutual funds where securities transaction tax (STT) has been paid, but the exact percentage has changed in recent Union Budgets, so confirm the currently applicable rate for the financial year in question rather than assuming a fixed figure.
- Does STCG on non-equity assets, like debt funds or property, get taxed the same way?
- No — short-term gains on most non-equity assets are typically added to your total income and taxed at your applicable income tax slab rate, rather than a flat rate. This can produce a materially different outcome depending on your overall income level for the year.
- Can I deduct expenses from the sale price before calculating the gain?
- Yes — costs directly connected to the transfer, such as brokerage fees, transfer costs, or (for property) registration and legal expenses, are generally deductible from the sale consideration before computing the capital gain, subject to specific rules for each asset class.
- Can short-term capital losses be set off against gains?
- Yes, short-term capital losses can generally be set off against both short-term and long-term capital gains in the same financial year, and unabsorbed losses can typically be carried forward for a limited number of subsequent years, subject to timely filing of the tax return.
- Does the holding period start from the purchase date or the payment date?
- Generally from the date of purchase (allotment or transfer of ownership), not the payment date, though the exact rule can vary slightly by asset type — for example, bonus shares are typically deemed acquired on the date of allotment, not the date of the original holding.
- How is STCG reported when filing an income tax return?
- STCG is typically reported in a dedicated capital gains schedule on the income tax return, separately from salary or business income, with different sub-sections for equity (flat-rate) and non-equity (slab-rate) gains. Brokers and mutual fund registrars usually issue a capital gains statement to help populate this schedule accurately.
- If I have both short-term and long-term gains in the same year, are they taxed together?
- No — they sit under separate heads even on the same return. Short-term gains on equity are taxed at the flat STCG rate (or slab rate for non-equity assets), long-term gains follow LTCG rules, and losses from one type generally can't offset the other freely, so it helps to total each category separately rather than netting everything into one number.
Putting it together
The tax you actually owe comes down to three things: the real gain (sale price minus purchase price minus eligible expenses), whether the holding period genuinely clears the short-term bar for that specific asset, and which treatment — flat rate or slab rate — applies to it. All three have moved in recent Union Budgets, which is why this page explains the mechanics rather than asserting a fixed number. Accurate records of purchase date, cost, and transfer expenses for every asset you hold will do more for the final figure than any rate assumption — verify the current rate before filing.
Methodology and assumptions
Figures are computed live from the purchase price, sale price, and expenses you entered, or illustrative defaults, using a commonly cited flat STCG rate for STT-paid equity as of recent tax years. This is general educational information, not tax advice — consult a qualified tax professional or chartered accountant for your specific situation, and verify current rates with the Income Tax Department.
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Not tax advice. Capital gains tax rates and rules change; verify current rates and thresholds with a qualified tax professional or the Income Tax Department before filing.