STCG (Short-Term Capital Gains) and LTCG (Long-Term Capital Gains) refer to the tax you pay on profits when you sell your investments such as equity mutual funds, stocks, real estate, or other capital assets. The key difference lies in the holding period and the tax rate.

1. Short-Term Capital Gains (STCG)

STCG applies when you sell an asset within a short holding period, which varies by asset class.

• For equity mutual funds and listed shares, selling within 12 months leads to STCG.
• STCG on equity is taxed at a flat rate of 20% + applicable cess and surcharge (as per the updated tax regime).

STCG generally has higher tax rates because the investment is considered short-term and speculative.

2. Long-Term Capital Gains (LTCG)

LTCG applies when you hold the asset beyond the specified period—for equity funds and stocks, this is more than 12 months.

• On equity mutual funds, LTCG up to ₹1,25,000 per financial year is tax-free.
• Gains above this limit are taxed at 12.5% + cess and surcharge.

LTCG attracts lower taxes, encouraging long-term investing.

Since tax rules are dynamic and subject to change, we recommend consulting your tax advisor for the latest and detailed guidance.