What is the difference between short-term and long-term Capital Gain?

In India, the distinction between shortterm capital gain (STCG) and longterm capital gain (LTCG) is based on the holding period of the asset. The holding period refers to the duration for which you hold the asset before selling it. The key differences between shortterm and longterm capital gain are as follows:

1. Shortterm Capital Gain (STCG):
Holding Period: Assets held for 36 months or less are considered shortterm assets.
Tax Rate: The shortterm capital gains tax rate is determined based on your applicable income tax slab rate. For resident individuals and Hindu Undivided Families (HUFs), the tax rates range from 5% to 30% plus applicable surcharge and cess.

2. Longterm Capital Gain (LTCG):
Holding Period: Assets held for more than 36 months are considered longterm assets.
Tax Rate: The longterm capital gains tax rate differs based on the type of asset:
For listed equity shares and equityoriented mutual funds, the LTCG tax rate is 10% (plus applicable surcharge and cess) if the gains exceed INR 1 lakh in a financial year.
For other assets like real estate and debt mutual funds, the LTCG tax rate is 20% (plus surcharge and cess).

It's important to note that the holding period and tax rates mentioned above are applicable as per the current tax laws in India. It's advisable to consult with a tax professional or financial advisor to understand the specific rules and regulations related to capital gains tax and the holding period for different assets, as these may be subject to change over time.