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Q.

How much Short-Term Capital Gain is Tax-Free?

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The short-term capital gains (STCG) tax depends on the asset type and holding period. There is no blanket tax-free limit for STCG, but certain exemptions and tax rates apply based on the asset class. I have shared more information on how much short term capital gain is tax free below.

How much is Tax Free Capital Gain?

For STCG, there is no upper limit on exemptions. As a result, your short-term capital gains are still liable to tax at the appropriate rates even if they are less than Rs. 1 lakh. Here are the equity shares and equity-oriented mutual funds (STT Paid).

  1. If sold within 12 months, gains are taxed at 15% (under Section 111A).

  2. No tax-free limit: even Rs 1 profit is taxable.

  3. Holding period ≤ 24 months (for immovable property) or ≤ 36 months (for debt funds/gold) qualifies as STCG.

  4. Gains are added to your income and taxed as per your applicable slab rate (5% to 30%).

  5. No separate exemption – but if total income (including STCG) is below Rs 2.5 lakh (Rs 3 lakh for seniors), no tax applies.

This is all about the free tax filing with capital gains.

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Also check

How to Calculate Capital Gains Tax on House Sale?

 


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