Reinvesting gains from stocks to claim exemption

Hello Team, I have a query related to equity stocks I have invested 5 lakh in stocks last year around August and I sold stocks this year February and profit I made was 2.5lakh from 5 lakh so my question is before march 31st can I invest whole 7.5 lakh in stocks to exempt income tax ? Is that will be a good thing or not ? Kindly suggest

Hey @9_kumar,

Once you have realised the profits, taxes need to be paid on the same even if the whole amount is reinvested into stocks.

As the holding period in your case is less than 12 months, the gains would be classified as short-term and tax will be applicable at 15%.

Hope this helps!

@Surbhi_Pal Thanks Surabhi for your explanation
So let’s say the profit I made is 2.5lakh in that for 1lakh there will be tax exemption right ? Or I have to pay 15% for 2.5lakh?


The ₹1 lakh exemption is available on LTCG and not STCG. Hence, in your case, 15% STCG tax will be applicable on ₹2.5L.