In the new tax scheme for FY 24-25, short-term capital gains (STCG) and long-term capital gains (LTCG) on listed shares and shares of equity-oriented mutual funds, along with business trust units, are subject to distinct tax treatment. Section 111A applies to STCG taxation if you keep securities for fewer than 12 months. The initial STCG taxation at 15% rose to 20% from July 23, 2024, without offering any threshold exemption. Under Section 112A of the Income Tax Act, securities kept longer than 12 months qualify as LTCG, subject to tax rates that will reach 12.5% from July 23rd, 2024. The ₹1,25,000 threshold exemption applies to LTCG, and it provides tax-free benefits when it comes to STCG vs LTCG while using the standard exemption limit.
Any payments for brokerage fees coupled with stamp duty expenses and GST on brokerage and SEBI turnover charges remain deductible, no matter if capital gain or profits from business and professional activity taxation apply. The tax regulations do not permit indexation benefits in cases of STCG vs LTCG. Short-term capital losses from STCG and LTCG can be used to offset each other, but long-term capital losses cannot be reduced through short-term gains. The tax rules explained above operate identically for individuals as well as HUFs, companies, LLPs, and other tax entities when dealing with listed securities and related financial instruments.
STCG vs LTCG FY 24-25 Under New Regime
| No | Particulars | STCG | LTCG |
| 1 | Covered under which
section |
Short-term capital gain covered u/s
111A |
Long-term capital gain covered u/s
112A |
| 2 | Securities covered | · Listed equity shares | · Listed equity shares |
| · Equity-oriented mutual fund | · Equity-oriented mutual fund | ||
| · Units of business trust | · Units of business trust | ||
| 3 | Holding Period | Securities sold within 12 months | Securities sold after 12 months |
| 4 | Tax rate before the 23rd
July 2024 |
15% | 10% |
| 5 | Tax rate on or after
23rd July 2024 |
20% | 13% |
| 6 | Threshold benefit | Nil | 1,25,000/- |
| 7 | Benefits of basic
exemption limit |
The benefit is available | The benefit is available |
| 8 | Benefit of Ch-VI(A)
deductions |
The benefit is not available | The benefit is not available |
| 9 | Benefit of rebate u/s
87A |
The benefit is not available | The benefit is not available |
| 10 | Benefit of marginal
relief |
The benefit is not available | The benefit is not available |
| 11 | Type of income | It is a special rate of income | It is a special rate of income |
| 12 | Taxable under which
head of income |
Capital Gain head or PGBP head | Capital Gain head or PGBP head |
| 13 | Allowance of
expenses: |
If chargeable under the capital gain head | If chargeable under the capital gain head |
| A | Brokerage | Deductible expense | Deductible expense |
| B | GST on brokerage | Deductible expense | Deductible expense |
| C | STT | Not a deductible expense | Not a deductible expense |
| D | Stamp duty | Deductible expense | Deductible expense |
| E | SEBI turnover fees | Deductible expense | Deductible expense |
| 14 | Allowance of
expenses: |
If chargeable under the PGBP head | If chargeable under the PGBP head |
| A | Brokerage | Deductible expense | Deductible expense |
| B | GST on brokerage | Deductible expense, if ITC is ineligible | Deductible expense, if ITC is ineligible |
| C | STT | Deductible expense | Deductible expense |
| D | Stamp duty | Deductible expense | Deductible expense |
| E | SEBI turnover fees | Deductible expense | Deductible expense |
| 15 | Assets not covered: | ||
| A | Unlisted equity shares | Unlisted equity shares | |
| B | Immovable property | Immovable property | |
| C | Debt-oriented mutual funds | Debt-oriented mutual funds | |
| D | Gold | Gold | |
| E | Silver | Silver | |
| F | Preference shares | Preference shares | |
| G | Other Jewellery | Other Jewellery | |
| H | Car, Bike, laptop | Car, Bike, laptop | |
| I | Other movable assets | Other movable assets | |
| J | Debentures etc. | Debentures etc. | |
| 16 | Assessee covered: | Individual | Individual |
| HUF | HUF | ||
| Company | Company | ||
| LLp | LLp | ||
| AOP/BOI, etc. | AOP/BOI, etc. | ||
| 17 | Indexation benefit | No benefit of indexation | No benefit of indexation |
| 18 | Set-off losses: | ||
| A | Inter head | STCL can be set off from LTCG | LTCL cannot be set off from STCG |
| B | Intra head | STCL can be set off from STCG | LTCL can be set off from LTCG |
| 19 | Article link | https://taxguru.in/income-tax/section-87a-rebate-stcg-tax-rules-fy-2024-25.html | https://taxguru.in/income-tax/section-87a-rebate-ltcg-tax-section-112a-fy-2024-25.html |
Disclaimer
The author holds personal opinions in this article. The content within this document serves only for educational purposes while excluding any kind of professional guidance. The article only aims to offer you general information. Therefore, all readers should get professional advice from competent professionals and tax advisors before making any decisions. In this article, the author bears no accountability for any damage, financial loss, or other consequences that emerge from the content distribution or from taking decisions based on this information delivery.