tep-by-Step Computation of STCG

Step 1: Determine the Full Value of Consideration (FVC)

• This is the total sale price (or aggregate consideration) received from the transfer of the asset.

Step 2: Determine the Cost of Acquisition & Directly Attributable Expenses

• Cost of Acquisition: The original purchase price (plus any incidental costs incurred at the time of purchase).

• Direct Expenses: Expenses incurred exclusively for facilitating the sale (e.g., brokerage, commission, transfer fees).

Step 3: Calculate the Short-Term Capital Gain (STCG)

• Use the formula:

STCG=Full Value of Consideration(Cost of Acquisition+Directly Attributable Expenses)

• Note: No indexation is allowed for short-term assets.

Step 4: Determine the Tax Treatment Based on Asset Type

1. For Equity Shares or Equity-Oriented Mutual Funds (with STT Paid):

   • Tax Rate: Under Section 111A, the resulting STCG is taxed at a flat rate of 15%.

   • • Example:
       If you sell shares with a gain of ₹50,000 and STT has been paid, the tax payable is 15% of ₹50,000 (i.e., ₹7,500), plus applicable surcharge and cess.

   • For Other Assets or in Cases Where STT is Not Applicable:

     • The computed STCG is added to the total income and taxed at the applicable individual or corporate slab rate (as per Section 48).

     • Example:
       If you sell a non-equity asset with an STCG of ₹50,000, that amount is added to your income, and the tax rate applied will depend on your applicable income tax slab.