What is STCG and LTCG on shares?
Everyone loves when their portfolio is in green colour so to enjoy the gains they sell the shares. But wait, do you know you have to pay a Capital gain tax on these gains? I am sure you must have heard these terms STCG and LTCG . Now let's understand these terms: • If you sell a stock in profit within 1 year then you're liable to pay the Short Term Capital Gain Tax (STCG). It is 15% on the profit. • If you sell a stock in profit after 1 year then you're liable to pay the Long Term Capital Gain Tax (LTCG). It is 10% on the profit. Also, there is one exception for LTCG. Till 1 lakh you're exempted to pay any capital gains but If the gains are more than 1 lakh then you have to pay the LTCG on the excess amount. Let's understand with a few examples: • If you bought stocks for Rs 1 lakh and sold it within 1 year for Rs 130000 so 30k is your profit. Now on this 30k, you are liable to pay a 15% capital gain tax so it will be 30000*15%= 4,500. ...