STCG (Short Term Capital Gains) — Mutual Fund Term Explained

Tax on equity fund gains if held less than 1 year. Flat 20% on any gain as per Budget 2024.

Short Term Capital Gains tax applies when you redeem equity mutual fund units within 1 year of investment. STCG on equity funds is taxed at 20% flat, regardless of your income bracket.

For debt funds, there is no STCG/LTCG distinction since April 2023.

Related terms

• LTCG (Long Term Capital Gains) — Tax on mutual fund gains after the qualifying period. For equity: 12.5% on gains above ₹1.25 lakh/year after 1 year. For debt: slab rate.
• Equity Fund — A mutual fund investing primarily (≥65%) in stocks. Highest long-term return potential but highest short-term volatility.
• Exit Load — A fee charged when you redeem mutual fund units before a specified holding period. Usually 1% if redeemed within 1 year. Nil after the lock-in.

Browse the full mutual fund glossary, or see this concept in action in the fund screener.