What is meant by Capital Gains? What are the different types of Capital Gain taxes?
Any profit/ gain you get from the sale of an investment asset is termed a Capital Gain.
You will be liable to pay tax on profits made from the sale of securities in the form of Capital Gains Tax. They are further categorized as short-term and long-term.
Characteristics | Short-term | Long-term |
Holding Period | * Equity: Less than 1 year * Equity-oriented mutual funds: Less than 1 year * Non-equity mutual funds: NA * Listed bonds & debentures: Less than 1 year *Unlisted bonds & debentures: Less than 3 years | * Equity: More than 1 year * Equity-oriented mutual funds: More than 1 year * Non-equity mutual funds: NA * Listed bonds & debentures: More than 1 year * Unlisted bonds & debentures: More than 3 years |
Tax Rate | * Equity and equity-oriented mutual funds: 15% of the gain * Non-equity mutual funds: As per your income tax slab * Listed and unlisted bonds & debentures: As per your income tax slab | * Equity and equity-oriented mutual funds: i. 10% of gains exceeding Rs. 1 lakh. ii. Gains cannot be indexed. iii. Gains are calculated as per the grandfathering clause * Non-equity mutual funds: As per your income tax slab * Listed bonds & debentures: 10% of the gain, without indexation * Unlisted bonds & debentures: 20% of the gain, without indexation |
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