STCG Tax Calculation Examples | Short Term Capital Gains [VIDEO]

STCG Tax Calculation on stocks or equity mutual funds can be easily calculated since you have to pay 20% on the profits made on short term investment or trading income. This means if your short term profit is Rs. 1 Lakh in FY 2025-26, you pay Rs. 20,000 as tax + cess of 4%. For those with no other income, you can adjust the STCG profit against the basic exemption limit of Rs. 2.5 Lakh and Rs. 4 Lakh respectively with old tax regime and new tax regime.

Let us understand STCG Tax Calculation with examples and video

STCG Tax Calculation Examples Video

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What is STCG or Short Term Capital Gains?

STCG full form is short term capital gains
The profits you make within a financial year based on the shares or equity mutual funds that you sell can lead to STCG
The capital gains or profits made are categorized as short term capital gains (STCG) or long term capital gains (LTCG)
If you sell the shares or equity mutual funds within 1 year of holding period, the profit you make is called short term capital gains
On this profits, you have to pay 20% of flat tax, irrespective of the tax bracket you belong to
You can watch above video to understand more about the STCG tax calculation examples
Also, if you have no other income apart from Short term capital gains, the STCG profits is exempted using basic exemption limit of Rs. 2.5 Lakh and Rs. 4 Lakh with old regime and new regime respectively

Income Tax Slab Rates 2025-26

There are few changes made in Budget 2025 related to tax slab rates of new tax regime.

No Income Tax up to 12 Lakh Income is the important highlight related to new tax regime. You get tax rebate of maximum Rs. 60,000 if your taxable income is within 12 lakh in FY 2025-26. Also, considering standard deduction of Rs. 75,000, you don’t have to pay income tax up to 12.7 lakh gross income.

Below are the tax slab rates for FY 2025-26:

Note that the new tax regime slab rates are applicable for all age groups. In old tax regime, senior citizens (60 years to 79 years) will pay 0% tax up to 3 lakh and super senior citizen (80 years+) will pay 0% tax up to 5 lakh income.

How to Calculate Income Tax 2025-26

It is important to understand how you income tax will be calculated in FY 2025-26.

Consider the example of Rs. 15 Lakh Income for salaried employee. Below is the tax calculation as per the income tax calculator in excel with old and new tax regime:

As seen above, you pay Rs. 2,57,400 with old tax regime and Rs. 97,500 with new tax regime. Tax with various slabs are calculated and then summed up to get total income tax including cess of 4%.

If is important to note that you get marginal relief in new tax regime on taxable income slightly above 12 Lakh in FY 2025-26.

So when your gross income is Rs. 13 lakh, and we remove standard deduction of Rs. 75,000, your taxable income will be Rs. 12.25 Lakh. On this income, instead of paying Rs. 60,000 as tax (based on 5% and 10% slabs), you only pay Rs. 25,000 (which is above Rs. 12 Lakh) as income tax + cess of 4%.

Below is the calculation on 13 Lakh income:

STCG Tax on Shares

STCG tax on shares are calculated based on 20% flat rate on profits made within 1 year
So if your STCG profits is 2 lakh, you pay Rs. 40,000 as STCG tax
Note that this is the special rate of tax and it does not matter in which tax bracket you belong. Every has to pay tax based on 20% flat rate
You get the adjustment of+ Basic exemption limit up to Rs. 4 lakh with new tax regime and Rs. 2.5 lakh with old tax regime
Which means, if you have no other income apart from STCG profits, than up to 4 lakh of profits, your tax will by Rs. 0 with new tax regime
If STCG profits goes above 4 lakh in 2025-26, than profits above 4 lakh will be taxed at 20%, and you won’t get tax rebate of Rs. 60,000 in this case, since rebate is only available with normal income which includes salary income or business income

STCG Tax on Equity Mutual Funds

STCG tax calculation on equity mutual funds also follow the same rule
You pay 20% tax on STCG profits made in financial year
Rebate of Rs. 60,000 is not available with STCG profits, but only with normal income of salary or business
Also profits up to 4 lakh with no other income will be non taxable as per basic exemption limit in new tax regime

Conclusion

So STCG Tax Calculation is based on 20% flat rate and is not dependent on the income tax bracket you belong to. You can adjust the basic exemption limit of Rs. 2.5 lakh and Rs. 4 Lakh respectively with old and new tax regime if you have no other income apart from short term capital gains

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Income Tax Calculator App – FinCalC

For Income Tax Calculation on your mobile device, you can Download my Android App “FinCalC” which I have developed for you to make your income tax calculation easy.

What you can do with this mobile App?

Calculate Income Tax for new FY 2024-25 and previous FY 2023-24
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