What Is Section 111A STCG on Equity Shares?
Section 111A provides a special tax-rate framework for specified short-term capital gains arising from qualifying securities transactions. The applicable rate and conditions should be checked for the relevant assessment year.
Quick Answer
Short-term gains on qualifying equity shares and specified equity-oriented investments can fall under section 111A when the statutory conditions are satisfied. The gain is reported through the capital-gains schedules rather than treated as ordinary salary or interest income.
What Transactions Can Fall Under Section 111A?
The provision covers specified short-term capital gains from qualifying equity shares, units of equity-oriented funds and certain other securities transactions where the statutory conditions, including the applicable securities transaction tax requirements, are satisfied.
Is Every Share Sale Covered?
No. The special-rate provision has specific conditions. A taxpayer should check the security type, transaction conditions and applicable law instead of applying section 111A automatically to every short-term share sale.
How Is It Reported?
The gain is reported in the appropriate short-term capital-gain section of the ITR. The AY 2026–27 return forms contain separate capital-gain rate categories and no longer require the older pre/post-23 July 2024 bifurcation in Schedule CG.
What Records Are Useful?
Broker capital-gain statements, contract notes, ISIN-level transaction records and evidence of applicable charges help support the computation.
Practical Checklist
- Confirm the security qualifies for section 111A.
- Check the applicable rate for the relevant AY.
- Reconcile STCG with the broker statement.
- Do not classify every short-term security gain as section 111A.
Related Capital Gains Questions
- What Is Capital Gain in Income Tax?
- What Is Short-Term and Long-Term Capital Gain?
- How to Calculate Capital Gain From Shares?
- What Is Cost of Acquisition for Capital Gains?
