Capital Gains Tax on Shares for FY 2026-27: STCG, LTCG, STT, F&O Income and How to Calculate It
- November 11, 2026
- Posted by: Ankit Jaiswal
- Category: Market
FY 2026-27: STCG on listed shares 20%. LTCG 12.5% on gains above Rs 1.25 lakh a year. Long-term means held over 12 months. Delivery STT 0.1%. F&O income is business income.
Quick Answer
Capital gains tax on shares for FY 2026-27 is 20% on short-term gains, which apply when you sell within 12 months, and 12.5% on long-term gains above Rs 1.25 lakh a year after holding for more than 12 months. Securities transaction tax is charged separately on every trade, and intraday and F&O profits are treated as business income taxed at your slab rate. Budget 2026 left the capital gains tax rates on equity unchanged.
Capital gains tax on shares is easy to get wrong because three things overlap: how long you held the shares, what kind of trade it was, and what other charges you paid along the way. A profit that looks the same on the app can be taxed at 20%, at 12.5% or at your slab rate.
This guide sets out the capital gains tax rules for FY 2026-27, explains STT and other charges, and gives worked examples. Tax law is revised often, so confirm the position with a chartered accountant for your own return.
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Capital Gains Tax on Shares: The Basic Rates for FY 2026-27
| Type of gain | Holding period | Tax rate |
|---|---|---|
| Short-term capital gain (STCG) on listed shares and equity funds | 12 months or less | 20% |
| Long-term capital gain (LTCG) on listed shares and equity funds | More than 12 months | 12.5% on gains above Rs 1.25 lakh in a year |
Budget 2026 made no change to these capital gains tax rates. The Rs 1.25 lakh exemption applies once per individual in a financial year to total long-term gains from listed equity and equity-oriented funds. There is no indexation benefit on equity.
How to Calculate Capital Gains Tax on Short-Term Share Sales
Subtract the purchase cost, including brokerage you paid to buy, from the sale value after deducting selling expenses. If you bought 100 shares at Rs 500 and sold them at Rs 580 within eight months, your gain is Rs 8,000 before costs, and tax at 20% is Rs 1,600 plus 4% cess.
How to Calculate Capital Gains Tax on Long-Term Holdings
Add up all long-term gains in the year, subtract losses that qualify for set-off, then subtract the Rs 1.25 lakh exemption. Suppose your long-term gains are Rs 3 lakh. Taxable gain is Rs 1.75 lakh, and tax at 12.5% is Rs 21,875 plus cess.
Timing matters for capital gains tax too. Holding a profitable position just past 12 months can cut the rate from 20% to 12.5%, and spreading sales across financial years lets you use the exemption more than once.
STT and Other Charges on Share Trades
Securities transaction tax is charged on every trade, whether it makes a profit or not. It is not deductible against your capital gains. The main rates are in the table below.
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| Trade | STT |
|---|---|
| Equity delivery, buy and sell | 0.1% on each side |
| Equity intraday, sell side | 0.025% |
| Futures, sell side (from 1 April 2026) | 0.05% |
| Options premium, sell side (from 1 April 2026) | 0.15% |
You also pay brokerage, exchange transaction charges, GST on those charges, SEBI turnover fees and stamp duty on the buy side, which is 0.015% for delivery and 0.003% for intraday. Over many trades these costs add up, so look at net returns after charges and tax on shares when you compare strategies on Nifty 50 stocks or others.
Intraday Trading and F&O: Business Income
Intraday equity profits are treated as speculative business income, taxed at your slab rate and not under capital gains tax. Profits and losses from futures and options are treated as non-speculative business income, also taxed at slab rate. Business income allows deductions for genuine expenses, but it needs the correct return form and, in many cases, an audit once turnover crosses the prescribed limits.
Losses: How Set-Off and Carry Forward Work
- Short-term capital loss can be set off against both short-term and long-term capital gains.
- Long-term capital loss can be set off only against long-term capital gains.
- Unabsorbed capital losses can be carried forward for eight years if you file your return on time.
- Speculative losses can be set off only against speculative gains.
Other Points to Remember
- The Section 87A rebate does not apply to capital gains taxed at special rates, so you may owe tax even if your total income is below the rebate limit.
- Share buyback proceeds are taxed as capital gains from FY 2026-27 instead of as dividend income.
- Advance tax can apply if your total tax liability for the year crosses the threshold.
- Keep contract notes and the broker’s profit and loss statement as records for your return.
Unlike capital gains on shares, dividends are taxed separately, at your slab rate. If a large part of your income comes from shares, consider consulting a tax professional before the year closes, when loss harvesting and timing of sales can still help.
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Conclusion
The tax on share gains for FY 2026-27 follows a simple structure: 20% for gains within 12 months, 12.5% above Rs 1.25 lakh for longer holdings, and slab-rate taxation for intraday and F&O income. STT and other charges are paid regardless of profit.
Keep clean records, watch your holding period and use the annual exemption to cut the tax on shares you sell. Check the final position with a tax adviser for your return.
Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data independently before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
Frequently Asked Questions
What is the tax on share gains in FY 2026-27?
Ans. Short-term gains on listed shares are taxed at 20% and long-term gains above Rs 1.25 lakh a year are taxed at 12.5%. Long-term means shares held for more than 12 months.
Is there any tax-free limit on long-term capital gains from shares?
Ans. Yes. The first Rs 1.25 lakh of long-term capital gains from listed equity and equity-oriented mutual funds in a financial year is exempt from tax for each individual.
Did Budget 2026 change capital gains tax on shares?
Ans. No. Budget 2026-27 kept the STCG rate at 20% and the LTCG rate at 12.5% with the Rs 1.25 lakh exemption. It raised STT on futures and options from 1 April 2026.
How is intraday trading profit taxed?
Ans. Intraday equity profit is treated as speculative business income and taxed at your income tax slab rate. It is not taxed as capital gains.
How is F&O income taxed in India?
Ans. Profit or loss from futures and options is treated as non-speculative business income and taxed at your slab rate. Genuine expenses can be deducted, and an audit may apply above prescribed turnover limits.
What is the STT on delivery trades?
Ans. STT on equity delivery is 0.1% on both the buy and sell side. It is paid on every trade and cannot be claimed as a deduction against capital gains.
Can I carry forward share trading losses?
Ans. Yes. Capital losses can be carried forward for eight years if the return is filed on time. Short-term losses can offset both short and long-term gains, while long-term losses offset only long-term gains.
