Capital gains — the basics
Profit from selling shares or equity mutual funds is a capital gain, taxed based on how long you held the asset. Listed equity held 12 months or less is a short-term gain; held beyond 12 months it’s a long-term gain, taxed at a concessional rate above an annual exemption.
Equity mutual funds
Equity funds follow the same holding-period rules as shares. Debt funds and other categories are taxed differently and generally don’t get the concessional equity LTCG rate — check the current rules for your fund type.
Intraday and F&O are different
Intraday equity trading is treated as speculative business income, and F&O as non-speculative business income — both are added to your total income and taxed at your slab, not as capital gains. Trading expenses can usually be claimed against this income.
Other things to know
STT is charged automatically on exchange trades. Gains are reported in your income-tax return; active traders may owe advance tax through the year. This is general information, not tax advice — consult a professional for your situation.
Frequently asked questions
What is the difference between STCG and LTCG on shares?
Listed shares or equity funds sold within 12 months are short-term capital gains (STCG); held beyond 12 months they are long-term (LTCG), taxed at a concessional rate above an annual exemption.
How is intraday trading taxed?
Intraday equity profit is treated as speculative business income and added to your total income, taxed at your slab rate — not as capital gains.
How is F&O income taxed?
F&O is treated as non-speculative business income, added to your total income and taxed at your slab. You can usually claim related trading expenses.
Do I pay tax on mutual fund gains?
Yes. Equity mutual funds follow the same STCG/LTCG rules as shares; debt and other categories are taxed differently. Always check the current rules for your fund type.