What are capital gains?

Business & Management
#1

Capital gains are the profit from the sale of a capital asset, such as a share or a property. Capital gains are subject to taxation in most countries. Some economists argue that capital gains should be taxed lightly (if at all) compared with other sources of income.

#2

A capital gains tax is a tax on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a cost amount that was lower than the amount realized on the sale. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property. Such Gains could either be Short Term Capital Gains or Long Term Capital Gains. The basis of such Classification in the Income Tax Return has been given below:-

  1. Short Term Capital Gain (STCG): If the Asset is held for less than 36 Months

  2. Long Term Capital Gain (LTCG): If the Asset is held for more than 36 Months