Short-term capital gains (STCG) tax on stock market profits is charged when you sell stocks within one year of buying them. For listed stocks in India, the tax rate is 15%. For unlisted stocks, the tax rate is 30%. This means if you sell your stocks within a year and make a profit, you will have to pay tax on that profit at the prescribed rate.

What Are Short-Term Capital Gains?

Short-term capital gains refer to the profits you make from selling a stock that you have owned for one year or less. In India, if you sell stocks within this period, the gain is considered short-term. These gains are taxed at a specific rate depending on whether the stock is listed on the stock exchanges or not.

Tax Rates for Short-Term Capital Gains in India

In India, the tax on short-term capital gains for listed stocks is 15%. This rate applies if you sell the stock within one year of buying it. However, for unlisted stocks, the tax rate is 30%. It's important to note that this tax is applied only on the gains made, not the entire sale amount.

How to Calculate Short-Term Capital Gains Tax?

To calculate the short-term capital gains tax, subtract the purchase price of the stock from the selling price. The difference is your gain. For listed stocks, the gain is taxed at 15%, and for unlisted stocks, it’s taxed at 30%. Remember to account for transaction costs (brokerage fees, etc.) while calculating the gain. Once you have the taxable gain, multiply it by the applicable tax rate.

What Are the Exemptions for Short-Term Capital Gains?

Currently, there are no exemptions for short-term capital gains on stocks in India. This means that any gain from the sale of stocks held for less than a year is subject to tax at the prescribed rate. However, the government may offer certain exemptions for other types of investments, but stocks are generally not exempt from this tax.

Are Short-Term Capital Gains Taxable on All Types of Stocks?

Yes, short-term capital gains tax applies to all types of stocks in India, whether they are large-cap, mid-cap, or small-cap. The only difference is the tax rate for listed vs. unlisted stocks. For listed stocks, the tax rate is 15%, and for unlisted stocks, it is 30%. This is true for stocks listed on the stock exchanges as well as those that are not.

How to Minimize Short-Term Capital Gains Tax?

One way to minimize short-term capital gains tax is by holding onto stocks for more than one year, as long-term capital gains are taxed at a lower rate. Additionally, you can offset some of your gains by selling other investments at a loss, a strategy known as tax-loss harvesting. Always consult with a tax professional to explore ways to legally reduce your tax liability.