Question

Difference between long and short term capital gain under capital asset

Answer 1

Explanation:

When there is a profit from the sale or transfer of a capital asset such as building, car, jewellery, shares, etc. it is known as capital gain, which is taxable under the Income Tax Act, as it is regarded as the income of the previous year in which the transfer occurs. It can be short-term capital gain or long-term capital gain. The short-term capital gain refers to the profit earned by an individual on account of the transfer of the short-term capital asset.

On the other extreme, when a long-term capital asset is transferred by an individual, the profit earned is called long-term capital gain. The primary difference between short-term and long-term capital gain lies in the period for which the capital asset or investment is held by an individual