How to differentiate between short term and long term capital gains?

To differentiate capital gains into long term and short term the period is 36 months and 12 months - which one to consider?

Hey Kunal,

For capital assets like Equity & preference share, Debentures & Government securities, Units of UTI and equity-oriented mutual funds and Zero-Coupon Bonds where STT is paid

  • If such assets are sold within 12 months of purchase, it is considered short term capital gains
  • If assets are held for more than 12 months, it is considered long term capital gains

However, the holding period is 36 months for other capital assets like house property, machinery, vehicles, etc

You can refer to Capital Gains guide on our learn center.

Hi @Ridhima_Sharma @TeamQuicko

I bought 500 shares at 100 rupees each on May 05, 2020, thereby investing 50,000 in a company. When the share price appreciated to Rs. 200 each, I sold 250 shares on Feb 15, 2021, thereby taking my initial investment of 50k.

As I have ONLY taken my initial investment out & not profit, will I be taxable under STCG ?

Pl advise

Hey @Abdul_Kaleem_shah, yes, you will have to file ITR 2 as the income you have received from selling the shares is considered as capital gains income and since you have sold it before holding them for 12 months it will be considered as STCG. You can read more about capital gains from here:

thanx @Maharshi_Shah for prompt response.

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If my Long term capital gains is below 1Lakh in a year, do I need to file ITR2 or I can just file ITR1 as usual (simple salaried with some interests). I read in few places, only over 1Lakh LTCG I’m liable to pay 10% taxes.

My Scenario: I have few old shares, which are very good priced at the current bull market. Now if I sell them, I might make a bit profit. But my investment is so low, I don’t want to take the headache by going into ITR2 for the next 8 years. I have no intraday or short term share trades. Maybe the overall gain will be just a mere 3-4 thousands (even amount to withdraw is just 14k or so).

Hey @sajalb, it is required that you file ITR 2 since you need to disclose the source of the income even though your profits are not taxable. Also, you do not have to file ITR 2 for 8 years in order to keep carry forwarding your losses.

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Thanks for the prompt reply. I understand it now. I hope I can cope up with the ITR2, feel very daunting to leave the comfort of ITR1.

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