Capital Gains Tax on Stocks in India: STCG, LTCG and STT
When you buy and sell listed Indian shares — exactly what tax you pay, when, and how to legally reduce it.
Listed Indian equity shares (sold via a recognised stock exchange with STT paid) get special — favourable — tax treatment. Knowing the thresholds saves real money at year-end.
Short-Term vs Long-Term
These rates apply only to listed shares with STT. Unlisted shares are taxed differently (slab rate for STCG, 12.5% without indexation for LTCG).
- Holding ≤ 12 months → STCG → 20% flat (rate revised by Budget 2024)
- Holding > 12 months → LTCG → 12.5% on gains above ₹1.25 lakh per FY
Quick Worked Example
You bought 1,000 shares of XYZ at ₹500 in Jan 2024 and sold at ₹900 in Mar 2026. Holding period > 12 months → LTCG. Gain = (900-500) × 1000 = ₹4,00,000. Exempt = ₹1,25,000. Taxable = ₹2,75,000. Tax = 12.5% × ₹2,75,000 = ₹34,375 + cess.
Run your own number: Capital Gains Tax Calculator → https://calculatordesk.in/capital-gains-tax-calculator
How to Legally Reduce It
- Harvest ₹1.25 lakh of LTCG every year (sell and rebuy) to use the annual exemption
- Set off short-term losses against any capital gain (long or short)
- Set off long-term losses only against long-term gains, carry forward 8 years
- Hold for >12 months to convert STCG (20%) into LTCG (12.5%)
Frequently Asked Questions
Is there indexation on listed equity LTCG?
No. Listed equity LTCG never had indexation benefit. The 12.5% rate applies on the actual nominal gain above ₹1.25 lakh.
Are intraday and F&O profits capital gains?
No. Intraday is treated as speculative business income; F&O is non-speculative business income. Both go in ITR-3, not as capital gains.
Do I pay STT and capital gains tax both?
Yes. STT is a small transaction tax (~0.1% for delivery) paid at trade; capital gains tax applies separately on profit at filing.