smallcases are baskets of stocks/ ETFs bought & managed together.
The same taxation guidelines that apply for stocks also apply for smallcases.
- If you sell your smallcase stock investments after 12 months of buying, your investments would qualify for long-term capital gains tax which is applicable at 10% of the gains, if the gains exceed ₹1,00,000
- If you sell your smallcase stocks before 12 months of holding, you will have to pay a short-term capital gains tax at the rate of 15% on the profits made (not applicable on losses)
Dividends on stocks are tax-free in the investors' hands.