What Is the Tax Rate on Short-Term Capital Gains on Shares?
For transfers covered by section 111A, the current ITR framework for AY 2026–27 identifies short-term capital gains chargeable at 20%. The specific transaction must satisfy the conditions of the applicable provision.
Quick Answer
Short-term capital gains covered by section 111A are currently shown at a 20% rate in the AY 2026–27 ITR framework. This is a special-rate provision and does not apply to every type of short-term capital gain.
When Does Section 111A Apply?
Section 111A applies to specified short-term capital gains, including qualifying transactions involving equity shares and specified securities subject to the conditions of the provision.
Current Rate for AY 2026–27
The Income Tax Department's AY 2026–27 ITR framework shows short-term capital gains under the relevant special-rate category at 20%.
Is Every Short-Term Share Gain Taxed at 20%?
No. The 20% special rate relates to gains covered by the relevant provision. Other short-term capital gains can be subject to different rates or provisions.
Why the Date of Transfer Matters
Capital-gains rates and provisions have changed over time. For current returns, the applicable transfer date and assessment year should be checked before calculating the tax.
How Should I Report It?
The applicable capital gain is reported through the capital-gains schedules of the relevant ITR. The correct return form depends on the taxpayer's overall income and circumstances.
Important
A broker's profit figure is not by itself a determination that section 111A applies. Confirm the security, transaction conditions, holding period and applicable tax provisions.
Frequently Asked Questions
Is short-term capital gain on all shares taxed at 20%?
No. The 20% rate applies to short-term gains covered by the relevant special-rate provision; other gains can have different treatment.
Does the 20% rate include cess and surcharge?
The 20% figure is the applicable special income-tax rate before considering surcharge and health and education cess where applicable.
Which ITR is used for short-term capital gains?
The applicable ITR depends on the taxpayer's complete income profile. A taxpayer with short-term capital gains generally cannot use ITR-1 under the current AY 2026–27 eligibility guidance.
Related EZTax Resources
- What Is AIS (Annual Information Statement) in Income Tax?
- AIS vs Form 26AS: What Is the Difference?
- Does AIS Show Capital Gains?
- AIS Reconciliation and AI-Powered Income Tax Filing with EZTax
- Capital Gains Income Tax Guide
Official Sources
For current capital-gains and ITR guidance, refer to the Income Tax Department resources for the relevant assessment year.
