How much tax should an investor pay on ₹3 lakh profit from shares or mutual funds? Check calculations — SkimNews
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- The Income-tax Act, 2025 applies to tax years beginning 1 April 2026, with capital gains provisions renumbered but the underlying framework broadly unchanged
- Listed equity shares meeting Securities Transaction Tax (STT) conditions face 12.5% LTCG tax after 12 months, with the first ₹1.25 lakh of annual LTCG exempt
- Short-term capital gains on listed equity shares held under 12 months are taxed at a flat 20% rate with no ₹1.25 lakh exemption
- The same ₹3 lakh gain — from buying at ₹10 lakh and selling at ₹13 lakh — attracts roughly ₹22,750 as LTCG or ₹62,400 as STCG, a nearly 3x difference
- Equity-oriented mutual funds investing over 60% of assets in equity shares follow the same LTCG/STCG rules as listed shares, including the ₹1.25 lakh annual exemption
- The taxable capital gain equals purchase cost minus sale price, not the total sale proceeds, so investors must compute the delta before applying rates
Why it matters: Selling listed equity or equity-oriented MFs even one day before the 12-month mark converts a ₹3 lakh gain into ₹62,400 of tax instead of ₹22,750, costing the investor ₹39,650 — and the flat 20% STCG rate also denies the ₹1.25 lakh annual LTCG exemption that would have shielded part of the gain.
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