By now most investors have already understood that profit on sale of shares is classified as short term capital gains (STCG) if shares are held for less than 12 months period. This is the period from the date of purchase to the date of sale and in case of multiple purchase dates, the STCG will be calculated based on the FIFO method (explained above). Short term capital gains (STCG) on equities are taxed at 15% of the gain amount. However, there are 2 conditions if you want to avail of this concessional STCG rate of 15%:

Firstly, these shares must be listed on a recognised stock exchange. However, if the transfer has taken place on or before July 10, 2014, listing of shares is not mandatory.

Secondly, the shareholder must have paid securities transaction tax (STT) on the stock at the time of purchase for it classify as STCG on equities and get the concessional tax rate.

Note: Period of holding to be considered is 24 months in case of unlisted shares of a company. For all listed shares it is 12 months from the date of purchase.