Small-cap funds are eligible for 2 types of taxes Short Term Capital Gain and Long Term Capital Gain. STCG is the capital gain formed on the units which are held for up to 1 year. The STCG tax levied by the Indian government is 15%. LTCG is the profit generated on the units which are held for more than 1 year. The LTCG imposed is 10% for the profit above Rs. 1 Lakh