Under the new tax regime for FY24-25, short-term capital gains (STCG) and long-term capital gains (LTCG) on listed equity shares, equity oriented mutual funds, and units of business trusts are treated differently. STCG, covered under Section 111A, applies when securities are held for less than 12 months. Initially taxed at 15%, the rate increased to 20% on or after July 23, 2024, and no threshold benefit is provided. In contrast, LTCG, governed by Section 112A, applies to securities held for more than 12 months, with a rate rising from 10% to 12.5% after the same date. LTCG offers a threshold benefit of ₹1,25,000, meaning gains below this threshold are exempt, while both gain types benefit from the basic exemption limit. Allowable expenses such as brokerage, GST on brokerage, stamp duty, and SEBI turnover fees are deductible in both cases, whether the gains are chargeable under the Capital Gain head or the Profit and Gains from Business or Profession (PGBP) head. However, neither STCG nor LTCG benefits from indexation. Additionally, set-off rules differ: while short-term capital losses can be set off against both STCG and LTCG within their respective heads, long-term capital losses cannot be set off against short-term gains. These provisions apply uniformly to individuals, HUFs, companies, LLPs, and other entities, ensuring clarity in tax compliance for transactions involving listed securities and related instruments.
STCG vs LTCG FY 24-25 under New regime:-
| Sr. 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 23rd July 2024 |
15% | 10% |
| 5 | Tax rate on or after 23rd July 2024 |
20% | 12.50% |
| 6 | Threshold benefit | Nil | 1,25,000/- |
| 7 | Benefit of basic exemption limit |
Benefit is available | Benefit is available |
| 8 | Benefit of Ch-VI(A) deductions |
Benefit is not available | Benefit is not available |
| 9 | Benefit of rebate u/s
87A |
Benefit is not available | Benefit is not available |
| 10 | Benefit of marginal relief |
Benefit is not available | Benefit is not available |
| 11 | Type of income | It is a special rate income | It is a special rate 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 capital gain head | If chargeable under capital gain head |
| A | Brokerage | Deductible expense | Deductible expense |
| B | GST on brokerage | Deductible expense | Deductible expense |
| C | STT | Not deductible expense | Not deductible expense |
| D | Stamp duty | Deductible expense | Deductible expense |
| E | SEBI turnover fees | Deductible expense | Deductible expense |
| 14 | Allowance of expenses |
If chargeable under PGBP head | If chargeable under 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 |
For better understanding of Sec 111A refer this article: https://taxguru.in/income-tax/section-87a-rebate-stcg-tax-rules-fy-2024-25.html
For better understanding of Sec 112A refer this article: https://taxguru.in/income-tax/section-87a-rebate-ltcg-tax-section-112a-fy-2024-25.html
*****
In case of any queries you may reach out to me at caashishsingla878@gmail.com
Disclaimer: The views & opinions expressed in this article are solely those of the author. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation. Readers should consult with a qualified professional or tax advisor before making any decisions based on the content of this article. Author will not accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.
Author Bio
A nice article with good tabulation. However, I have a query. Please let me know how the rebate of Rs 1,25,000 on LTCG will be apportioned in following cases between gains before 22.7.24 and after 22.7.24 :
Case 1 Case 2 Case 3
LTCG till 22.7.24 250000 75000 0
LTCG after 23.7.24 200000 200000 200000
This is not my specific case, but is a general case from which many people will benefit.
Rgds
Deepak Shara
Hi Deepak,
Kindly refer to this article that I have published:
https://taxguru.in/income-tax/section-87a-rebate-ltcg-tax-section-112a-fy-2024-25.html
If you still have any questions after reading, feel free to leave a comment.