Capital Gains Tax in India for UPSC | Economy Detailed notes
Capital Gains Tax is a tax levied on the profit (gain) earned from the sale or transfer of a capital asset. This tax applies when the selling price of
Concept of Capital Gains Tax Capital Gains Tax is a tax levied on the profit (gain) earned from the sale or transfer of a capital asset. This tax applies when the selling price of an asset exceeds its purchase price. The term "capital asset" includes properties like land, buildings, stocks, bonds, and mutual funds, excluding personal items like clothes or furniture. Key Features of Capital Gains Tax 1. Types of Capital Assets Capital assets are divided into two categories based on the holding period: Short-Term Capital Asset (STCA): Assets held for a short duration before sale. Examples:
Listed shares held for less than 1 year. Property or real estate held for less than 2 years. Tax applicable: Short-Term Capital Gains (STCG). Long-Term Capital Asset (LTCA): Assets held for a longer duration before sale. Examples:
Listed shares held for more than 1 year. Property held for more than 2 years. Tax applicable: Long-Term Capital Gains (LTCG). 2. Tax Rates Short-Term Capital Gains Tax (STCG): Taxe…