STCG Tax in India (FY 2026-27): Rates, Holding Periods & Loss Set-Off
STCG (Short-Term Capital Gains) is the tax on profits from sale of capital assets held shorter than the prescribed holding period, with rates varying by asset class under the Income Tax Act 1961. Listed equity STCG is taxed at 20% for FY 2026-27.
2 min read · Updated June 2026
Holding periods (post Finance Act 2024, effective July 23, 2024) — assets held BELOW these thresholds = STCG: listed equity shares, equity mutual funds, business trusts → less than 12 months. Unlisted shares, immovable property, gold, debt mutual funds → less than 24 months. Other listed securities → less than 12 months.
Tax rates (FY 2026-27 onwards, carried over from FY 2025-26): listed equity / equity MFs / business trusts (STT-paid) → 20% (increased from 15% effective July 23, 2024). All other STCG (debt MFs, gold, property, unlisted shares, foreign assets) → added to taxable income and taxed at slab rate (5%/10%/15%/20%/25%/30% depending on total income). Surcharge and 4% Health and Education Cess apply on top.
Worked examples (equity STCG): ₹50,000 STCG → ₹50,000 × 20% = ₹10,000 + 4% cess = ₹10,400 total. ₹2,00,000 STCG → ₹40,000 + ₹1,600 cess = ₹41,600 total. There is NO ₹1.25 lakh exemption for STCG (the exemption applies only to LTCG). Surcharge stacks for incomes above ₹50 lakh. Use the Equity Capital Gains Calculator at /in/tools/equity-capital-gains-calculator to plug in your own trade ledger including loss set-off.
Intraday vs delivery — important distinction: intraday equity trading (buy and sell same day, no delivery taken) is taxed as SPECULATIVE BUSINESS INCOME under Section 43(5), not as STCG. Speculative losses can only be set off against speculative gains, and carry forward only 4 years (not 8). Delivery-based trades held under 12 months are STCG at 20%. F&O is also business income (non-speculative under Section 43(5)) — see the F&O Trading Tax Calculator for that treatment.
Loss treatment and set-off rules: short-term capital losses can be set off against BOTH STCG and LTCG of the same FY (same-head intra-year set-off is broad). Losses not fully set off can be carried forward for 8 assessment years, set off only against future capital gains (not against salary, business, or other income). The ITR must be filed within the due date to claim carry-forward — late filing forfeits the carry-forward right entirely.
Debt mutual funds rule (Finance Act 2023): for debt MFs purchased AFTER April 1, 2023, all gains regardless of holding period are taxed at slab rate (no LTCG benefit, no indexation). These effectively became STCG-equivalent for taxation. Debt MFs bought BEFORE April 1, 2023 still get the 12.5% LTCG rate without indexation after 24 months. For tracking purposes, this means two sub-portfolios of the same fund with different tax treatment.
Recent changes and key thresholds: the equity STCG rate jumped from 15% to 20% on July 23, 2024 — a 33% relative increase that significantly affects active traders, portfolio churners, and rebalancers. Budget 2026 (February 2026) kept this rate unchanged, so FY 2026-27 follows the same regime. For long-term wealth building, the 20% STCG vs 12.5% LTCG gap (with ₹1.25L exemption) creates a strong incentive to hold equity beyond 12 months wherever possible.
Equity STCG rate of 20% vs LTCG of 12.5% creates a 7.5pp tax wedge — usually worth holding past the 12-month mark unless your sell thesis is strong. For debt MFs bought after April 1 2023, there is no LTCG benefit anymore — all gains are slab-rate. Track holding dates carefully: a sale on day 365 is STCG; day 366 is LTCG. Richify's capital gains tracker shows the day count on each holding so you don't accidentally pay STCG on a position one day shy of long-term status.
