Difference Between Long-Term Capital Gains Tax And Short-Term Capital Gains Tax
- Blog|Income Tax|
- 3 Min Read
- By Taxmann
- Last Updated on 24 May, 2021
Capital Gains Tax:
Capital gain is the profit earned on the sale of capital assets such as real estate, mutual funds, bonds, and stocks. Those owning the assets and earning gains from the sale of such capital assets are required to pay tax on gains. , In most cases, the tax rate on capital gains is lower than that on your regular income. The exact tax rate on capital gains is subject to a period of holding of a capital asset which bifurcates the capital asset into long-term and short-term capital asset. Capital gains earned on long-term capital assets and short-term capital assets are taxed at different rates. Before we delve deep into the differences between short-term and long-term capital gains tax, let us first clarify what these are all about.
Understanding two types of Capital Gains Tax:
Short Term Capital Asset:
Learning the difference between short term & Long term Capital Gains:
Effect of Income on Capital Gains Taxes:
The tax rates on capital gains as explained above hold true in most cases. We do hope that the above-stated clarification has dispelled your doubts about “long-term capital gain tax and short-term capital gain tax”.
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