Short-Term Capital Gains Tax Calculator (Equity)
What Is This Tool?
Short-term capital gains are profits from selling stocks held for less than 12 months. These gains are taxed as ordinary income at your slab rates, not at special capital gains rates. Our STCG calculator helps you instantly calculate your tax on stock trading profits and understand how much of your gains go to taxes.
Why This Can Be Confusing
Many traders confuse short-term and long-term capital gains taxation. STCG from stocks is taxed at your regular slab rates just like salary, while LTCG gets preferential rates. Additionally, the holding period is calculated as per stock exchange rules, which sometimes confuses retail investors.
How This Tool Works
This calculator takes your capital gain and adds it to your total income. It then applies your tax slab rate, calculates surcharge and cess, showing exactly how much tax you owe on your stock trading profits. The results show your effective tax rate on the gain.
Step-by-Step: How to Use This Tool
- 1.Enter your residency status
- 2.Input the capital gain from stock sale (selling price minus cost price)
- 3.Specify your residency status to apply correct slab rates
- 4.Review your tax liability on the short-term gain
- 5.See total tax and net profit after tax
Real-Life Situations Where This Tool Helps
- ✓Day traders calculating tax on weekly or monthly stock sales
- ✓Short-term investors selling stocks within 12 months for quick profits
- ✓Traders who bought stocks and sold within a year
- ✓People with trading accounts trying to understand profit after tax
- ✓Investment advisors helping clients understand STCG implications
Common Mistakes
- ⚠Confusing STCG with long-term capital gains which have much lower tax rates
- ⚠Forgetting that the holding period starts from the purchase date (stock exchange rules)
- ⚠Not accounting for transaction costs like brokerage which reduce the gain
- ⚠Assuming all gains are taxed at a flat rate when they're added to total income
- ⚠Not adjusting cost price for stock splits or bonus shares before calculating gain
Benefits
This calculator shows exactly how much tax reduces your trading profit. Instead of guessing, you see your exact liability. This helps day traders and short-term investors plan their trading strategy with full knowledge of tax impact and decide if trading frequency justifies the high tax burden.
Frequently Asked Questions
How is short-term capital gains taxed?+
STCG from stocks is taxed as ordinary income using your regular tax slab rates. Your gain is added to your total income and the entire amount is taxed. If you earn ₹50 lakhs salary and ₹10 lakhs STCG, the entire ₹60 lakhs is taxed.
What is the holding period for STCG?+
Short-term means less than 12 months from the date of acquisition to the date of sale. If you buy on January 1 and sell on December 31, it's still short-term (less than 365 days).
Can I offset trading losses against gains?+
Yes, you can offset trading losses in the same year against trading gains. However, if losses exceed gains, you cannot carry forward the loss to future years for STCG (loss carry forward has specific rules).
Do I pay higher tax on STCG?+
Yes, STCG is taxed much higher than LTCG. STCG uses your personal slab rate (up to 30%+) while LTCG has preferential rates (10-20%). This makes long-term holding more tax-efficient.
How do I calculate cost price for tax?+
Cost price includes the purchase price plus all acquisition costs (brokerage, taxes, etc.). For inherited stocks, cost is the fair market value on the date of inheritance. For bonus shares, cost price is adjusted.
What if my STCG is huge—how much tax?+
If you earned massive STCG, you'll pay significant tax at your marginal rate plus surcharge. For example, ₹1 crore STCG for a person in 30% slab = ₹30 lakhs tax + surcharge = approximately ₹34-35 lakhs tax.