Capital gain

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SHYAMLAL KAYYARUVATH (Querist)

10 July 2012 Dear sir,

I would like know about capital gain and what is the difference between short term and long term capital gain.

Regds
Shyamlal

Jinesh Bhagdev

Jinesh Bhagdev (Expert)

10 July 2012 Capital Gain is the gain that accrues to you in the event of sale of a capital asset.

Before you understand capital gain, it is better you understand Capital Asset

Long Term Capital Asset: When a capital asset is held for a period of more than 36 months (12 months in case of shares or mutual funds or securities), then the asset can be classified as long term capital asset

Short Term Capital Asset: When a capital asset is held for a period of less than 36 months (less than 12 months in case of shares or mutual funds or securities), then the asset can be classified as short term capital asset.

Gain / Loss arising on sale of Long Term Capital Asset is Long Term Capital Gain / Loss and Gain / Loss arising on sale of Short Term Capital Asset is Short Term Capital Gain / Loss

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

10 July 2012 1. Capital gain arises on the transfer of a capital asset.

2. Long term capital gain arises on the transfer of a long term capital asset & short term capital gain arises on the transfer of a short term capital asset.

3. Long term capital asset or short term capital asset, how to be determined?

Capital asset other than shares:
if period of holding is 36 months or more -long term, otherwise short term.

Capital asset being shares:
If period of holding is 12 months or more- long term, otherwise short term.

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