What is STCG (Short Term Capital Gains)? — Meaning, Definition & Example
Definition
STCG applies when you sell a capital asset before the minimum holding period — 12 months for listed equity/equity MF, 24 months for property, debt MF, and gold. Listed equity STCG is taxed at 20%, while other asset STCG is taxed at your income tax slab rate.
If you buy Infosys shares at ₹1,400 and sell after 8 months at ₹1,600, the ₹200 profit per share is STCG taxed at 20% = ₹40 per share.
🇮🇳 STCG (Short Term Capital Gains) in Hindi / हिंदी में
STCG (शॉर्ट टर्म कैपिटल गेन्स) — STCG तब लागू होता है जब आप न्यूनतम होल्डिंग अवधि से पहले कोई पूंजीगत संपत्ति बेचते हैं। लिस्टेड इक्विटी पर 20% कर लगता है।
STCG (Short Term Capital Gains) (Hinglish) — STCG tab lagta hai jab aap minimum holding period se pehle asset bech dete ho. Listed equity pe 20% tax hai, baaki assets pe slab rate se tax lagta hai.
When Is a Gain Short-Term? (The Asset Clock)
| Asset | Short-Term If Held | STCG Tax |
|---|---|---|
| Listed stocks & equity MFs | < 12 months | 20% flat (Sec 111A, post-Budget-2024) |
| Property (land/building) | < 24 months | Your slab rate |
| Physical gold / jewellery | < 24 months | Slab rate |
| Debt mutual funds (post-Apr-2023) | Any holding period | Slab rate — never becomes long-term |
| Unlisted shares | < 24 months | Slab rate |
The Exemption That Doesn't Exist
The ₹1.25 lakh annual exemption applies to LTCG only. STCG on equity is taxed at 20% from the first rupee — the single most common confusion we see. One genuine relief exists for residents whose total other income is below the basic exemption limit: the unused basic exemption can absorb 111A gains (a student with only ₹2L of STCG may pay far less than 20% — worth knowing for family accounts).
Intraday and F&O Are NOT Capital Gains
Same-day buy-sell (intraday) is speculative business income; F&O is non-speculative business income — both taxed at slab, reported as business income (ITR-3), with their own loss set-off silos (speculative losses only offset speculative gains, 4-year carry-forward). Calling your intraday profits 'STCG' in the ITR is a classic mismatch notice. Delivery-based selling within a year = STCG; everything faster = business.
Set-Off: STCL Is the More Useful Loss
Short-term capital LOSSES offset BOTH short-term and long-term gains (long-term losses can't touch STCG). Carried forward 8 years if the ITR is filed on time. Practical play in a bad year: book short-term losses before 31 March to neutralise the 20% liability, then re-enter — factor STT, DP charges and price-move risk before mechanical harvesting.
Two Timing Levers Worth Real Money
① The 12-month line is worth 7.5 percentage points on equity (20% → 12.5% + the LTCG exemption kicks in). Selling at month 11 for no reason is donating tax. ② Advance-tax applies to gains: booked big STCG in June? Pay by the next installment (15 Sep) to avoid 234C interest. Full asset-wise rules in the capital-gains guide; scenario math in the calculator.
Rules verified as of July 2026 (post-Budget-2024/2025 framework, unchanged by Budget 2026). Facts last checked: 14 July 2026 by Priyanka Dhawan.