Short-term capital gains (STCG) arise when equity shares are sold within 12 months of acquisition. These gains are classified into two categories: those taxable under Section 111A and other STCG. Section 111A covers those shares and mutual fund units that are sold through recognised stock exchanges and are subject to Securities Transaction Tax (STT).
After the announcement of Budget 2024, these short-term gains are taxed at the rate of 20%. The other STCG category includes gains from the sale of shares not covered under Section 111A, which are taxed at different rates.