Capital Gains Tax: Tax rules on earnings from the stock market have changed, now how much LTCG will have to be paid, STCG and STT also announced in the budget

Budget Capital Gains Tax: Finance Minister Nirmala Sitharaman has made a big announcement in the budget regarding the tax on earnings from the stock market. Changes in capital gains tax have been announced in the budget. In the budget, it was announced to increase the long-term capital gains (LTCG) tax from 10 percent to 12.5 percent. However, its limit has also been increased from Rs 1 lakh to Rs 1.25 lakh. Apart from equity, long-term capital gains have been increased on all types of financial assets i.e. all financial and non-financial assets. Capital gains will be levied on unlisted bonds, debentures.

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What is LTCG

The income earned on selling shares listed in the stock market after 12 months of purchase comes under the category of long term capital gains. Till now, income tax of 10% was to be paid on the income of more than Rs 1 lakh. But from today, there will be no tax on gains of less than Rs 1.25 lakh, but 12.5% ​​tax will have to be paid on income of Rs 1.25 lakh or more.

STCG also increased by 20 percent

At the same time, the short-term capital gains (STCG) tax on select assets has been increased to 20 percent. The Finance Minister announced in the budget that the STCG tax on certain financial assets has been increased to 20 percent. Currently it is 15 percent. The 15 percent short-term capital gains tax on other financial assets has been retained.

Short term capital gains are when shares listed in the stock market are sold within 12 months of purchase. Till now, short term capital gains tax has to be paid at the rate of 15 percent on the income earned from this. But from today, tax will have to be paid at the rate of 20 percent on some selected assets.

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Security Transaction Tax (STT)

In the 2024 budget, the security transaction tax (STT) on F&O of securities has been increased by 0.02 per cent and 0.1 per cent. At the same time, tax will be levied on income receipts from share buyback.

Futures increased from 0.0125% to 0.02%
Options increased from 0.0625% to 0.1%

Security Transaction Tax (STT) was included in the Income Tax Rules in 2004. Security Transaction Tax i.e. STT is levied on shares bought and sold in the stock exchange. Whenever shares are bought and sold in the stock market, this tax has to be paid on it.