What is FIFO in tax calculations?

FIFO (First In, First Out) is the mandatory method for calculating capital gains tax on equity sales in Demat accounts in India, where the earliest purchased shares or units are deemed sold first. This determines holding periods for each lot, classifying gains as short-term (STCG, under 12 months, taxed at 20%) or long-term (LTCG, over 12 months, with Rs 1.25 lakh exemption and then 12.5%).