Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Listed shares
STCG: 20% (Section 111A). LTCG: 12.5% on gains over ₹1.25 lakh a year (Section 112A). Confirm rates per the current Finance Act.
Unlisted shares differ
They turn long-term after 24 months and LTCG is 12.5% without indexation. See the post-Budget-2024 changes.
Set-off, STT and grandfathering
A few practical rules sit around the headline rates. The ₹1.25 lakh long-term exemption is per year across all listed equity and equity-fund LTCG combined, not per transaction. Both the 20% short-term and 12.5% long-term rates under Sections 111A and 112A apply only where Securities Transaction Tax was paid — that is, normal market sales; off-market transfers are taxed differently. Capital losses can be set off: a short-term loss against either short- or long-term gains, a long-term loss only against long-term gains, with up to eight years’ carry-forward if you file the return on time. For shares bought before 31 January 2018, a grandfathering rule protects the gains accrued up to that date, so the cost is stepped up to the higher of actual cost or the 31 January 2018 value when computing LTCG. The rates above apply to sales on or after 23 July 2024; sales before that date used the earlier 15% and 10% figures, so a year straddling that date needs the gains split by sale date. Keeping a clean record of purchase dates, costs and STT-paid contract notes is what makes the computation defensible. Confirm the rates per the current Finance Act.