Short-Term Capital Gains (STCG)
Profit from selling a capital asset held for less than the minimum long-term holding period, generally taxed at higher rates than long-term gains.
An asset sold before it crosses the minimum holding period that would classify it as long-term, commonly 12 months for listed equity, longer for many other assets, produces a short-term capital gain instead. STCG on listed equity and equity mutual funds is taxed at a specific flat rate under current rules, while STCG on most other assets is added to total income and taxed at the applicable slab rate.
Because short-term gains on equity are typically taxed at a higher rate than long-term gains on the same asset, the holding period alone can materially change the tax outcome of a sale, which is why many investors deliberately time exits around the long-term threshold where it makes a meaningful difference.
This glossary entry is for general informational purposes only and does not constitute professional tax, legal, or financial advice. Rules and rates change, so consult a qualified Chartered Accountant for advice specific to your situation.