Capital Gains

 Hello Friends,

My this blog is related to tell you about the basic of Capital Gains. 

Capital Gain is any Income derived on the sale of Capital asset (movable or immovable) is taxable under the head under Income Tax Act 1961. The Capital Gains have been divided in two parts under Income Tax Act 1961. One is short term capital gain and other is long term capital gain.

Types of Capital Gains

One is short term capital gain and other is long term capital gain.

Short Term Capital Gains : 

• If any taxpayer has sold a Capital asset within 36 months and Shares or securities within 12 months of its purchase then the gain arising out of its sales after deducting therefrom the expenses of sale(Commission etc) and the cost of acquisition and improvement is treated as short term Capital Gain and is included in the income of the taxpayer.

• The deduction u/s 80C to 80U can be taken from the income from short term capital gain apart from the short term capital gain u/s111A.

• The short-term capital gains attract a capital gain tax at a rate of 15%. 

• Rebates can be received in case of the short term capital gains under section 54B, 54D, 54G and 54GA. 

Long Term Capital Gain

• A Capital Asset held for more than 36 months and 12 months in case of shares or securities is a long term capital asset and the gain arising therefrom is a long term capital gain. Long term capital gains are arrived at after deducting from the net sale consideration of the long term capital asset the indexed cost of acquisition and the indexed cost of improvement of the asset.

• The long-term capital gains attract a capital tax at a rate of 20% with indexation.

• Rebates can be received in case of the short term capital gains under section 54, 54B, 54D, 54EC, 54F, 54G and 54GA.

I hope it will be helpful to you.

Thanks & Regards

Kulvinder Kaur

B.Com(H), MBA(Finance)

9871580806,8826566751

rightsteptoinvest@gmail.com