Capital Gains

Capital Gain is profits that results from investments into stocks, bonds , real estate, Gold ETF .The profits thus made will be taxed differently.

To start with Capital Gains are classified as Short Term Capital Gains and Long Term Capita Gains

Long Term Capital Gains: If Stocks and Mutual Funds are held for atleast 1 Year and then sold , the profits made would be considered as Long Term Capital Gains. But in case of Real Estates , the holding period needs to be more than 3 Years for the profits made to be considered as Long Term Capital Gains.

Short Term Capital Gains : Are gains made from Stocks and Mutual Funds that are held for less than 1 Year and Real Estates for less than 3 Years.

In case of Stocks , if stocks had been purchased at different times , the concept of First In First Out from demat account would be considered to ascertain the date of purchase. And it is also important that the Stocks needs to be sold on a recognised stock exchange , duly paying the requisite STT( Securities Transaction Tax )

Capital Gains Tax Rate for different types of securities. click to view tax rates

source :finance.indiamart.com

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