I started investing in equities in 2025. I recently booked gains after selling some shares, though the amount is minimal. Can you please tell me what my tax liability would be? I had no other income last year.
—Name withheld on request
It is assumed that you are investing in listed equity shares as an investor.
Gains arising from the sale of listed equity shares held for less than 12 months are treated as short-term capital gains (STCG). STCG on listed equity shares, where Securities Transaction Tax (STT) has been paid, is subject to a flat tax rate of 20%, plus applicable surcharge and health and education cess at 4%.
Assuming you qualify as a resident in India and have no other income for 2025-26, the basic exemption limit ( ₹2,50,000 for individuals below 60 years of age under the old regime and ₹4,00,000 under the new regime) can be adjusted against the STCG while computing your taxable income.
If your total income does not exceed the basic exemption limit, no tax liability may arise. Where total income exceeds the basic exemption limit, only the portion above the threshold will be taxed at the applicable STCG rate, along with surcharge (if applicable) and education cess.
It is important to note that since STCG is taxed at special rates, it is not eligible for rebate (if applicable) under Section 87A.
My family consists of me, my wife, my minor child and my mother. All adults fall in the 20% or higher income-tax bracket. If I set up an HUF account and invest money in debt funds that pay regular coupons, can I minimize tax by utilizing the HUF’s basic exemption limit and lower tax slabs for the ₹4-8 lakh bracket?
—Name withheld on request
An HUF (Hindu Undivided Family) is treated as a separate taxpayer under the Income-tax Act.
The same income slabs, basic exemption limits and tax rates applicable to individual taxpayers (under the old or new tax regime) also apply to an HUF. If an HUF invests its own funds in income-earning assets such as debt funds or fixed-income instruments that generate periodic interest or coupons, the resulting income will be taxable as ‘income from other sources’ in the hands of the HUF at the applicable slab rates.
Receipt of funds or property by an HUF from its members is not considered a taxable transaction.
Parizad Sirwalla is partner and head-global mobility services (tax), KPMG, in India.
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