India Capital Gains TaxShort-term capital gains tax
Short-term gains are taxed in two ways under the Income-tax Act, 2025 (read on 13 November 2026). On an equity share, a unit of an equity-oriented fund or a unit of a business trust where securities transaction tax is chargeable on the sale, section 196 taxes the short-term gain at 20%. On any other asset the short-term gain is part of total income and is taxed at the slab rates.
Examples with other income of ₹15 lakh and a gain of ₹3 lakh
| Asset | Tax on the gain |
|---|---|
| Listed shares held 6 months (20%) | ₹62,400 |
| Property held 12 months (slab rates) | ₹57,200 |
What is short-term
See the holding period page: 12 months or less for listed securities and equity fund units, 24 months or less for anything else.
Common questions
Are short-term gains on mutual funds taxed at 20%?
Section 196 covers short-term gains on equity-oriented fund units, equity shares and business trust units where securities transaction tax is chargeable on the sale: 20%. Short-term gains on other assets are added to total income and taxed at the slab rates.
Sources
- The Income-tax Act, 2025, as published in the Gazette of India Extraordinary: section 2 (short-term and long-term capital asset), sections 196, 197 and 198 (tax on capital gains). The enacted text was read on 13 November 2026.
- Slab tax on other income, the ₹4,00,000 first slab and the 4% cess for 2026-27: the Tax Slabs section of this family (its own sources apply).
Rules read on 13 November 2026 from the Income-tax Act, 2025. Surcharge, losses, reinvestment exemptions and indexation are not worked. This site is independent, not connected with the Income Tax Department, and gives arithmetic, not tax advice. Ask a chartered accountant about your own sale.