Short term capital gain tax

Dear Client,

Since your father, a senior citizen, purchased a flat in July 2024 for Rs. 21 lakhs including all costs and is selling it in June 2025 for Rs. 32 lakhs including brokerage, the profit of Rs. 11 lakhs qualifies as short-term capital gain (STCG), as the holding period is less than 24 months. STCG on property is taxed at normal income tax slab rates, not at a flat rate. Your father’s total annual income, including Rs. 85,000 from interest and Rs. 11 lakhs from capital gain, comes to Rs. 11.85 lakhs.

As per senior citizen tax slabs under the old regime, his total tax liability would be approximately Rs. 1.72 lakhs including cess, assuming no deductions are claimed. However, if he invests in eligible tax-saving instruments like under Section 80C or 80D, this liability could be reduced.

Dear Client,
If the property is sold before 24 months from the date of acquisition, the gain on such transfer is termed as a short-term capital gain. Budget 2024 has proposed the following amendments effective from FY 2024-25 in respect of capital gains. A property held for less than 24 months is considered Short-Term and property held for short term shall continue to attract tax at slab rates. If total taxable income (excluding short-term capital gains) stays within Rs.3,00,000 for resident individuals above 60 years, HUF, and NRI, then unutilized exemption can be adjusted against short-term capital gain. Short-term capital gains (STCG) are taxable regardless of the amount of gain. Unlike long-term capital gains (LTCG), which have an exemption limit of Rs 1.25 lakh per year, there is no exemption limit for STCG. Income Tax is a branch of law or legislation, that eventually comes under the arena of Chartered Accountants and Tax Consultants who have expertise and in-depth knowledge on the subject and may guide you properly to understand the tax implication on STCG.