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Tax
Twelve months, 20% short-term, 12.5% long-term above ₹1,25,000 — and why the exemption is shared.
Direct equity is the one asset class with its own capital-gains sections rather than the general rule. Since 23 July 2024 a listed share held over twelve months is long-term, the long-term rate is 12.5% on gains above a ₹1,25,000 exemption for the year, and a short-term sale pays 20% — both conditional on securities transaction tax having been paid, which is what makes the sale a 'specified' one. Listed bonus and rights shares, ESOP sales and off-market transfers each bend the rule, so this guide keeps the definitional lines in view.
| Asset | Long-term after | Short-term | Long-term |
|---|---|---|---|
| Equity shares / equity funds (STT paid) | 12 months | 20% | 12.5% above ₹1,25,000 |
| Unlisted shares | 24 months | Your slab | 12.5% |
| Other capital asset | 24 months | Your slab | 12.5% |
Holding period is counted from the date the shares are credited to your demat account to the date of transfer. Over twelve months and the gain is long-term (section 112A) at 12.5% above the ₹1,25,000 exemption; twelve months or less and it is short-term (section 111A) at 20%. Both rates apply only where STT was paid on the transfer — an off-market sale or a transfer to a family member is outside section 111A/112A and falls back to slab or the general 12.5% long-term rule.
Section 112A exempts the first ₹1,25,000 of long-term gains across all specified assets in the financial year — shares, equity-oriented funds and business-trust units together. Sell two holdings at a ₹1 lakh gain each and the exemption absorbs the first, not both. This is also why the exemption cannot be claimed on unlisted shares or on foreign shares: they never enter section 112A.
Both rates are base rates. A 4% health-and-education cess applies to the tax, and a surcharge applies at higher income — including on capital gains, with the section 112A long-term rate capped at 15% surcharge. The calculators here apply cess and stop there, saying so, rather than guessing your total income.
A short-term capital loss can be set off against any capital gain (short or long), while a long-term loss can only be set off against long-term gains — and both can be carried forward for eight years if the return is filed on time. Sections 80C to 80U cannot be set against gains taxed at the concessional 15%/20% short-term rate, so a tax-saving investment never offsets an equity trading gain.
Compute STCG or LTCG on a share sale →
Per year, per taxpayer, and shared across every section 112A asset — listed shares, equity-oriented mutual funds and business-trust units. The first ₹1,25,000 of long-term gains in the financial year is exempt; everything above it is taxed at 12.5%.
No. The test is twelve months from the date of acquisition (the credit date in your demat account) to the date of transfer. A day short is a short-term gain at 20%. The calculators take the holding period in months, so enter 12 or more only when the holding is genuinely past twelve months.
Selling realises the gain and the tax with it — buying back resets your cost and your holding period, it does not undo the transaction. The legitimate version of this idea is using the ₹1,25,000 exemption to book gains you would otherwise pay tax on later, which is a planning decision for your own position, not a rule in this tool.
Reviewed 25 Sept 2026. Tax rates are set by statute and change with the annual Finance Act, so the Income Tax Department's own pages are the authority — every claim here links to one, with the snapshot date noted where the department's site refused an automated read.