Short-Term Capital Gains Tax: What You Need to Know to Stay Compliant
Short-term capital gains tax is a critical aspect of the financial landscape that every investor must understand to ensure compliance with Indian tax regulations. In India, short-term capital gains (STCG) refer to the profits generated from the sale of assets held for a short period - typically less than 36 months in the case of real estate and less than 12 months for other assets like shares and mutual funds. For assets like shares and mutual funds that are sold within 12 months of acquisition, the short-term capital gains tax applies. The tax rate on such gains is set at 15% under Section 111A of the Income Tax Act. However, it's important to note that these gains should fall under the category of equity-oriented funds to be eligible for this tax rate. In the context of real estate or non-equity-oriented funds, the STCG will be taxed as per the individual's income tax slab. For instance, if an investor sells equity shares for ₹3,00,000 which were bought for ₹2,00,000 within a...