Published 26 Sep 2026 · Last reviewed 26 Sep 2026 · 2 min read
In short: For listed equity shares, equity-oriented mutual funds and business-trust units subject to STT, short-term gains are generally taxed at 20% and qualifying long-term gains above the annual ₹1.25 lakh threshold at 12.5%, plus applicable surcharge and cess.
Holding period
For the covered listed-equity assets, up to 12 months is generally short term and more than 12 months is long term. Other mutual funds can have different classification and tax treatment.
Equity rates
Section 111A applies to eligible short-term gains at 20%. Section 112A applies to eligible long-term gains at 12.5% above the aggregate ₹1.25 lakh annual threshold. These post-23 July 2024 rates remain reflected in AY 2026–27 forms.
Non-equity funds
Debt-oriented and specified mutual-fund rules depend on the fund, acquisition date and current law; many gains are taxed at the applicable slab rate. Verify the scheme tax note and obtain tax advice.
Set-off and records
Short-term capital loss may generally offset short- or long-term capital gains; long-term capital loss only long-term gains, subject to filing and carry-forward rules. Preserve statements, acquisition cost and STT evidence.
Before acting
Tax law and fund classification change. Confirm the financial year, asset type, residency, grandfathering and surcharge/cess with a qualified professional.
Action checklist
- Write down the goal, amount and deadline.
- Check liquidity, risk, costs, tax and exit restrictions.
- Use only regulated intermediaries and original documents.
- Record assumptions and review after major life or rule changes.
Sources and methodology
We prioritised official Indian regulator, tax authority and industry-body material. Numerical examples are illustrations, not forecasts. Product rates, limits and taxation should be rechecked on the transaction date.
- Income Tax Department — ITR guidance for AY 2026–27 (accessed 2026-09-26)
- Income Tax Department — notified return schedules (2026) (accessed 2026-09-26)
Frequently asked questions
Is this article investment advice?
No. It is general education. Your goals, taxes, cash flow and risk capacity require individual assessment.
Can returns be guaranteed?
No. Market-linked investments can lose value; past performance does not guarantee future results.
What is the quick answer on STCG vs LTCG?
For listed equity shares, equity-oriented mutual funds and business-trust units subject to STT, short-term gains are generally taxed at 20% and qualifying long-term gains above the annual ₹1.25 lakh threshold at 12.5%, plus applicable surcharge and cess.
STCG vs LTCG stocks mutual funds India
Last reviewed: September 2026 · Educational only — not investment, tax, legal or property advice. See Disclaimer.