STCG Calculator

No Exemption Threshold for Short-Term Gains

Short-term capital gains on listed equity shares and equity mutual funds (held 12 months or less) are taxed at a flat 20% on the entire gain — there's no ₹1.25 lakh exemption here the way there is for long-term gains. Every rupee of short-term gain is taxable, which is one reason holding an investment past the 12-month mark can make a meaningful tax difference even before considering the lower long-term rate.

Worked Example

Shares bought for ₹2,00,000 and sold for ₹2,80,000 after 6 months:

The full ₹80,000 gain is taxed — compare this to the same gain realized after 12+ months, where the first ₹1.25 lakh of long-term gains in the year would be exempt and the remainder taxed at 12.5% instead of 20%.

Losses Can Offset Other Gains

A short-term capital loss can be set off against either short-term or long-term capital gains in the same year, giving it more flexibility than a long-term loss (which can only offset long-term gains). Unused short-term losses can be carried forward for up to 8 assessment years, provided the loss year's return was filed on time.

What Counts as Short-Term Depends on the Asset

This calculator applies a 12-month cutoff and the flat 20% rate that's specific to listed equity shares and equity mutual funds. That's a reasonable default for the most commonly traded assets, but it isn't a universal rule — several other asset classes use a different holding-period cutoff, and gains falling short of that cutoff are taxed differently too, not always at a flat rate.

If you're calculating a gain on property, an unlisted investment, or anything other than listed equity or equity mutual funds, this calculator's flat 20% figure doesn't apply — the gain is typically added to your total income and taxed at your income-tax slab rate instead, which could be higher or lower than 20% depending on your total income for the year.

Why Holding a Few Extra Months Can Matter

Because short-term gains on equity are fully taxable with no exemption threshold, while long-term gains benefit from the ₹1.25 lakh annual exemption and a lower 12.5% rate, the calendar matters more than it might seem. Selling an equity holding a few weeks before the 12-month mark, purely to book a gain sooner, can mean paying tax on the entire amount at 20% rather than potentially owing nothing (if the gain is within the exemption) or paying a lower rate on the excess.

This isn't a suggestion to always wait out the calendar — market conditions, liquidity needs, and portfolio strategy matter too. But when a sale is close to the 12-month boundary and there's no urgent reason to sell immediately, it's worth checking how many days remain before treating a near-term sale as short-term by default.

Surcharge and Cess Apply on Top of the Base Rate

The 20% figure this calculator applies is the base short-term rate on listed equity and equity mutual funds. Depending on your total income for the year, a surcharge can apply on top of that base tax once income crosses certain thresholds, and health and education cess is added on the tax-plus-surcharge amount regardless of income level. Your effective, all-in rate on a large short-term gain can therefore run a bit higher than the flat 20% shown in this tool's output — factor this in when estimating your total tax outflow.

Short-Term Gains and Advance Tax

If your short-term capital gains (along with your other income) push your total tax liability for the year above the threshold that triggers advance tax obligations, you're generally expected to pay tax on the gain within the same quarter it arose, rather than waiting until you file your return. Because a large short-term gain can arrive unexpectedly — for instance, from a sudden market rally — many taxpayers only realise the advance tax shortfall at year-end, which can attract interest for the delayed payment. If you've booked a sizeable short-term gain during the year, it's worth checking whether an advance tax instalment is due before the next deadline.

Netting Multiple Transactions Across the Year

Most active investors don't have a single short-term transaction in a year — they have dozens or hundreds across different stocks and mutual funds. The 20% rate applies to your net short-term gain for the year, meaning short-term gains and short-term losses across all your transactions are netted together first, and only the resulting net figure (if positive) is taxed. A string of profitable trades sitting alongside a few losing ones isn't taxed transaction-by-transaction — the losses reduce the taxable gain for the year as a whole.

This calculator computes tax on a single transaction for illustration. For your actual return, you'll need to total every short-term equity transaction for the financial year — broker-issued capital gains statements or the tax department's Annual Information Statement are the usual starting points for pulling this together accurately, since manually reconstructing dozens of trades from memory is where errors creep in.

Where STCG Shows Up When You File

Short-term capital gains on listed equity and equity mutual funds are reported under the capital gains schedule of your income tax return, kept separate from your salary or business income schedules even though the tax computation ultimately combines everything into one total liability. Because equity transactions are typically reported to the tax department by brokers, depositories, and mutual fund houses, mismatches between what you report and what's reflected in your Annual Information Statement are a common source of return-processing queries — reconcile your own transaction records against the AIS before filing rather than relying purely on your own count of trades.

STCG Doesn't Reset Because You Reinvested the Proceeds

A common misconception is that reinvesting the sale proceeds of a short-term equity sale into another investment defers or avoids the tax on the original gain — it doesn't. Unlike some reinvestment routes available for certain long-term gains (typically tied to property or specified bonds), there's generally no equivalent reinvestment exemption for short-term capital gains on listed equity or equity mutual funds. The tax on a short-term gain is triggered by the sale itself, independent of what you subsequently do with the money — buying new shares with the proceeds is a fresh, separate transaction with its own holding period starting from scratch, not a way to roll over the earlier gain tax-free.

Securities Transaction Tax and Why It Matters for the Rate

The flat 20% short-term rate discussed throughout this guide applies specifically where Securities Transaction Tax (STT) has been paid on the transaction — which is the normal case for shares and equity mutual fund units bought and sold through a recognized stock exchange in India. Transactions that fall outside this — certain off-market transfers, or equity shares sold on a foreign exchange, for instance — can be taxed differently, generally at your applicable slab rate instead of the flat STT-linked rate. Since most retail investors transact entirely through a recognized exchange via a broker, STT is usually already baked into the transaction without any separate action needed, but if you're dealing with an off-market transfer or a foreign-listed holding, confirm which rate regime actually applies before assuming the flat rate this calculator uses is the correct one.