TAXATION OF INCOME FROM EQUITY MARKET 📣
STCG (Short-Term Capital Gains)
• If equity shares listed on a stock exchange are sold within 12 months of purchase, the seller may make short term capital gain or incur a short-term capital loss. The seller makes short-term capital gain when shares are sold at a price higher than the purchase price
• Short-term capital gains are taxable at 15%
LTCG (Long-Term Capital Gains)
• If equity shares listed on a stock exchange are sold after 12 months of purchase, the seller may make a long-term capital gain or incur a long-term capital loss. Before the introduction of Budget 2018, the long-term capital gain made on the sale of equity shares or equity-oriented units of mutual funds was exempt from tax
• The Financial Budget of 2018 took away this exemption. Henceforth, if a seller makes a long-term capital gain of more than INR 1 lakh on the sale of equity shares or equity-oriented units of a mutual fund, the gain made will attract a long term capital gains tax of 10% (plus applicable cess)
STT (Securities Transaction Tax)
• STT is applicable on all equity shares sold or bought on a stock exchange. The above tax implications are only applicable for shares listed on a stock exchange. Any sale/purchase on a stock exchange is subject to STT. Therefore, these tax implications discussed above are only for shares on which STT is paid
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