If you earned short-term capital gains (STCG) during the financial year 2024–25 (assessment year 2025–26), you must disclose it correctly in your income tax return (ITR) to avoid notices, penalties, or loss of refund eligibility.
Here is a step-by-step guide on how to report STCG in your ITR for AY 2025–26:
✅ 1. Understand What Qualifies as STCG
STCG arises when a capital asset (such as equity shares, mutual funds, property, gold, etc.) is sold within the specified holding period. The holding periods are:
- Listed equity shares / equity mutual funds: Held for < 12 months
- Debt mutual funds / property / gold: Held for < 36 months
✅ 2. Determine the Applicable Tax Rate
| Asset Type | Tax Rate |
|---|---|
| Equity shares / equity mutual funds (STT paid) | 15% u/s 111A |
| Other capital assets (e.g. property, gold) | Slab rate |
Additionally, cess @ 4% and surcharge, if applicable, are added.
✅ 3. Choose the Correct ITR Form
| Situation | ITR Form |
|---|---|
| Salary + STCG on equity shares | ITR-2 |
| Business income + STCG | ITR-3 |
| Presumptive business income + STCG | ITR-3 |
| Only capital gains (no salary/business income) | ITR-2 |
✅ 4. Collect Required Details
You’ll need:
- Purchase & Sale Dates
- Purchase & Sale Prices
- Brokerage, STT, other charges
- ISIN (for listed securities)
- Statement from broker or CAMS/KFintech (for mutual funds)
- Form 26AS and AIS (Annual Information Statement)
✅ 5. Fill the Capital Gains Schedule in the ITR
In ITR-2 or ITR-3, locate Schedule CG (Capital Gains). For STCG, focus on:
A. For STCG u/s 111A (Equity Assets)
- Go to: Schedule CG > A1
- Enter:
- ISIN / Script Name
- Number of units sold
- Sale consideration
- Cost of acquisition
- Expenditure on transfer
- Date of purchase and sale
- Full value of consideration
- Net STCG
B. For STCG on other assets
- Go to: Schedule CG > A2
- Enter:
- Sale proceeds
- Indexed or non-indexed cost (indexing not allowed for STCG)
- Expenses related to transfer
✅ 6. Verify if Losses Can Be Adjusted
- STCG can be set off against STCL (Short-Term Capital Loss) or LTCL (Long-Term Capital Loss)
- Carry forward of losses is allowed for 8 years, but only if ITR is filed before due date
✅ 7. Declare in Schedule SI (Special Income)
- Go to Schedule SI and declare income taxed at special rate (15% u/s 111A)
- The ITR utility will auto-calculate the tax based on input.
✅ 8. Verify Total Tax Computation in Schedule TI & Tax Payable
Ensure your STCG is reflected correctly in:
- Schedule TI (Total Income)
- Tax computation section
✅ 9. Cross-check with AIS & Form 26AS
Reconcile your STCG details with:
- AIS (Annual Information Statement)
- Form 26AS – for TDS on capital gains, if any
✅ 10. File Before Due Date to Avoid Loss of Benefits
- Due date: 31st July 2025 (unless extended)
- File before due date to:
- Carry forward capital losses
- Avoid penalty u/s 234F
📌 Additional Notes:
- Use the latest ITR Utility (Excel/Java/Online) available on https://incometax.gov.in
-
If foreign capital assets sold, reporting in Schedule FA (Foreign Assets) is also required.