Short-Term Capital Gains (STCG) on listed shares and equity-oriented mutual funds are subject to a concessional rate of 15% till transfer made on or before 22nd July, 2024. From 23rd July, 2024 onwards this rate has been increased to 20%.
Short-term capital gains are taxed as per the income tax slab rates applicable to the individual. For instance, if the short-term capital gain is Rs 6 lakh and the person falls in the 30% tax bracket, then he/she has to pay 31.20% on Rs 6 lakh, i.e.
Capital gains tax rates
Net capital gains are taxed at different rates depending on overall taxable income, although some or all net capital gain may be taxed at 0%. For taxable years beginning in 2024, the tax rate on most net capital gain is no higher than 15% for most individuals.
As per the latest changes proposed in Union Budget 2024, short-term capital gains (STCG) on certain specified financial assets will be taxed at 20%, up from the previous rate of 15%. This new rate only applies to these specific assets.
Short-Term Capital Gains Rates Tax rates for short-term gains are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Short-term gains are for assets held for one year or less - this includes short term stock holdings and short term collectibles.
Short-term capital gain rates are the same as ordinary tax rates for 2024. This means the lowest-income taxpayers will pay 10% short-term capital gains tax rates, and the highest-income taxpayers will pay 37% short-term capital gains tax rates. A full table of rates based on filing status and income is provided above.
For example, in 2024, individual filers won't pay any capital gains tax if their total taxable income is $47,025 or below. However, they'll pay 15 percent on capital gains if their income is $47,026 to $518,900. Above that income level, the rate jumps to 20 percent.
Short-term capital gains are taxed as ordinary income, and income tax rates in 2024 and 2025 range from 10 percent to 37 percent. Because short-term capital gains are treated like income, a net short-term capital gain for the tax year could potentially bump you into a higher tax bracket.
The tax rate on debt funds is determined by the investor's income tax slab. The short-term capital gains tax rate is 20% and for the long-term capital gains, the tax rate is now a flat 12.5%, but without any indexation benefits. Debt mutual funds are classified based on their underlying investments.
Capital gains are categorized by holding period. Long-Term Capital Gains (LTCG) arise from assets held beyond 12 months (e.g., listed equity shares, equity mutual funds), offering favorable tax benefits. Short-Term Capital Gains (STCG) result from assets sold within 12 months, typically taxed at higher rates.
Current tax law does not allow you to take a capital gains tax break based on your age. In the past, the IRS granted people over the age of 55 a tax exemption for home sales, though this exclusion was eliminated in 1997 in favor of the expanded exemption for all homeowners.
Therefore, this will then be classified as a short term gain or STCG. Tax on these short term gains will need to be paid as per the Indian resident's income tax slab. For example : if one's income tax slab is at 20%, then then tax on STCG will also be 20%.
Short-term capital gains taxes range from 0% to 37%. Long-term capital gains taxes run from 0% to 20%. High-income earners may be subject to an additional 3.8% tax called the net investment income tax on both short- and long-term capital gains.
Long-Term Capital Gains (LTCG) that exceed Rs. 1.25 lakh in a financial year are subject to a 12.5% tax rate from 23rd July, 2024. For transfers made up to 22nd July, 2024, the tax rate of 10% will be applicable.
STCG Tax Rate on Shares (Section 111A)
Short-term capital gain under Section 111A is taxed at a concessional rate of 15% with applicable cess. However, with effect from 23rd July 2024, the tax on Short-term capital gain under Section 111A has been increased to 20%.
The short-term capital gains tax is a levy on gains resulting from the sale of assets you've held for one year or less. The short-term capital gains tax is typically applied to the sale of securities, including stocks and mutual funds.
What if I reinvest the proceeds? Buying additional stock shares with the proceeds from a stock sale will not eliminate or reduce capital gains taxes. However, if you reinvest the gain into a QOF (Qualified Opportunity Fund), you can defer the payment of capital gains taxes while you are invested in an eligible fund.
Yes, but there are limits. Losses on your investments are first used to offset capital gains of the same type. So, short-term losses are first deducted against short-term gains, and long-term losses are deducted against long-term gains. Net losses of either type can then be deducted against the other kind of gain.
Capital Gains Formula for Calculation
In the case of short term capital gains, the computation is as given below: Short-term capital gain= (full value consideration) - (cost of acquisition + cost of improvement + cost of transfer).
Gains you make from selling assets you've held for a year or less are called short-term capital gains, and they generally are taxed at the same rate as your ordinary income, anywhere from 10% to 37%.