Capital Assets (stock, property and precious metals) that are sold or transferred can be taxable as capital gains for the year in which they occur.
Capital Assets can be divided into two types: long-term and short-term.
When they are held longer than 12 months, shares, debentures, and mutual funds are considered long-term capital assets. They are short-term capital if they are not sold or transferred within 12 months.
Gains on the transfer of short-term and long-term capital assets are subject to different tax rates. Gains from short-term capital assets are subject to regular income tax.
An investor who sells IPO allocation shares within 12 months of IPO Allotment is subject to short-term capital gains. These gains are subject to tax along with regular income, i.e. tax on his salary.