{"id":7947,"date":"2025-07-16T13:03:25","date_gmt":"2025-07-16T13:03:25","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?post_type=glossary&#038;p=7947"},"modified":"2025-07-16T13:03:26","modified_gmt":"2025-07-16T13:03:26","slug":"capital-gains-on-shares","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/capital-gains-on-shares\/","title":{"rendered":"Capital Gains on Shares"},"content":{"rendered":"<p><strong><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/capital-gains-on-shares\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Capital gains on shares<\/a><\/strong> refer to the <strong>profit<\/strong> you make when you <strong>sell <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/shares\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>shares<\/a> at a higher price<\/strong> than what you paid. These gains are <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/tax\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>tax<\/a>ed based on how long you held the shares&mdash;short-term or long-term.<\/p>\n\n\n\n<p>&#x1F9E0; <em>Think of it as: Buy low, sell high = <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/capital-gain\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">capital gain<\/a>. But tax rules depend on how long you wait!<\/em><\/p>\n\n\n\n<h2 id=\"two-types-of-capital-gains\" class=\"wp-block-heading\">Two Types of Capital Gains<\/h2>\n\n\n\n<h3 id=\"1-short-term-capital-gains-stcg\" class=\"wp-block-heading\">1. <strong>Short-Term Capital Gains (STCG)<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>When:<\/strong> You sell shares <strong>within 12 months<\/strong><\/li>\n\n\n\n<li><strong>Tax Rate (from July 2024):<\/strong> <strong>20%<\/strong> (earlier 15%) + surcharge + cess<\/li>\n\n\n\n<li><strong>Example:<\/strong><br>Buy &#x20B9;30,000 worth of shares &#x2192; Sell for &#x20B9;45,000<br>Profit: &#x20B9;15,000 &#x2192; Tax = &#x20B9;3,000 (at 20%)<\/li>\n<\/ul>\n\n\n\n<h3 id=\"2-long-term-capital-gains-ltcg\" class=\"wp-block-heading\">2. <strong>Long-Term Capital Gains (LTCG)<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>When:<\/strong> You sell shares <strong>after 12 months<\/strong><\/li>\n\n\n\n<li><strong>Tax Rate:<\/strong> <strong>12.5%<\/strong> (from July 2024) <strong>on gains above &#x20B9;1 lakh\/year<\/strong><\/li>\n\n\n\n<li><strong>Example:<\/strong><br>Buy shares for &#x20B9;1 lakh &#x2192; Sell for &#x20B9;1.5 lakh<br>Gain = &#x20B9;50,000 &#x2192; Tax = <strong>&#x20B9;0<\/strong> (as it&#x2019;s under &#x20B9;1 lakh limit)<\/li>\n<\/ul>\n\n\n\n<h2 id=\"how-to-calculate-capital-gains\" class=\"wp-block-heading\">How to Calculate Capital Gains<\/h2>\n\n\n\n<pre class=\"wp-block-code\"><code>Capital Gain = Sale Price &#x2013; (Purchase Price + <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/expense\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Expenses<\/a>)<\/code><\/pre>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Include:<\/strong> <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/broker\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>Broker<\/a>age, STT (Securities Transaction Tax), and other charges<\/li>\n\n\n\n<li><strong>Don&#x2019;t include:<\/strong> <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/dividend\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Dividend<\/a> income&#x2014;it&#x2019;s taxed separately<\/li>\n<\/ul>\n\n\n\n<h2 id=\"losses-and-set-off\" class=\"wp-block-heading\">Losses and Set-Off<\/h2>\n\n\n\n<p>You can <strong>adjust losses<\/strong> to reduce tax:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Short-term loss<\/strong> can be set off against both <strong>STCG<\/strong> and <strong>LTCG<\/strong><\/li>\n\n\n\n<li><strong>Long-term loss<\/strong> can only be set off against <strong>LTCG<\/strong><\/li>\n\n\n\n<li>You can <strong>carry forward losses for 8 years<\/strong><\/li>\n<\/ul>\n\n\n\n<p><em>From FY 2026-27: You&#x2019;ll be allowed a one-time set-off of long-term capital loss against short-term gains<\/em>.<\/p>\n\n\n\n<h2 id=\"tax-filing-rules\" class=\"wp-block-heading\">Tax Filing Rules<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Report gains under the &#x201C;Capital Gains&#x201D; head in your ITR<\/li>\n\n\n\n<li>Use <strong>ITR-2<\/strong> (if you have capital gains but no business income)<\/li>\n\n\n\n<li>Provide <strong>ISIN-wise<\/strong> detail (if required) and upload trade statements<\/li>\n<\/ul>\n\n\n\n<h2 id=\"quick-summary-table\" class=\"wp-block-heading\">Quick Summary Table<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>Type<\/th><th>Holding Period<\/th><th>Tax Rate (From July 2024)<\/th><th>Exemption<\/th><\/tr><\/thead><tbody><tr><td><strong>STCG<\/strong><\/td><td>&#x2264; 12 months<\/td><td>20%<\/td><td>None<\/td><\/tr><tr><td><strong>LTCG<\/strong><\/td><td>&gt; 12 months<\/td><td>12.5% on gains &gt; &#8377;1 lakh<\/td><td>&#x20B9;1 lakh per year<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 id=\"final-thoughts\" class=\"wp-block-heading\">Final Thoughts<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If you sell shares <strong>within a year<\/strong>, expect <strong>20% tax<\/strong> on gains<\/li>\n\n\n\n<li>If you sell <strong>after a year<\/strong>, your gains are <strong>tax-free up to &#x20B9;1 lakh\/year<\/strong>, and taxed at <strong>12.5%<\/strong> beyond that<\/li>\n\n\n\n<li>Use <strong>losses smartly<\/strong> to lower your tax<\/li>\n\n\n\n<li>Always keep a record of <strong>buy\/sell prices and dates<\/strong><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Capital gains on shares refer to the profit you make when you sell shares at a higher price than what you paid. These gains are taxed based on how long you held the shares&#x2014;short-term or long-term. &#x1F9E0; Think of it as: Buy low, sell high = capital gain. But tax rules depend on how long [&#x2026;]<\/p>\n","protected":false},"author":9,"featured_media":0,"menu_order":0,"template":"","meta":{"footnotes":""},"class_list":["post-7947","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/9"}],"version-history":[{"count":1,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7947\/revisions"}],"predecessor-version":[{"id":7948,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7947\/revisions\/7948"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=7947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}