Profits from the sale of capital assets, such as real estate, buildings, jewelry, or even virtual digital assets, like cryptocurrency, are capital gains. The capital gain in income tax act is the profit you earned from the sale of a capital asset, such as property, stocks, mutual funds, or gold. I have shared more details about it below.
Types of Capital Gain Under Income Tax Act
The capital gains are classified as short-term or long-term, depending on the holding period of the asset.
Short-term Capital Gains (STCG)
It arises when an asset is sold within a specified holding period (e.g., 36 months for immovable property, 12 months for equities).
These gains are taxed as per the applicable income tax slab rates.
Long-term Capital Gains (LTCG)
It applies when the asset is held beyond the prescribed period and is taxed at a lower rate, often with indexation benefits to adjust for inflation.
For instance, LTCG on equity shares exceeding Rs 1 lakh in a financial year is taxed at 10% without indexation. Certain exemptions, like Section 54 (for house property) and Section 54EC (for reinvestment in bonds), can reduce tax liability.
The calculation involves deducting the cost of acquisition (and improvement) from the sale value, with adjustments for indexation in long-term assets.
This is all about what is capital gain under Income Tax Act.
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Also check
How to Avoid Paying Capital Gains Tax on Inherited Property?
How does Capital Gains Tax Work on Property?
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What Is Capital Gain Under Income Tax Act?
akash
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2025-05-27T18:29:40+00:00 2025-05-27T18:29:42+00:00Comment
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