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What is the difference between Long Term Capital Gains and Short Term Capital Gains ?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Renju M.R asked over 2 years ago

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4 Answers
Picsjoin 2017224123730582 Archana answered over 2 years ago

Hie Renju M.r Parameter Short Term Capital Gain Long Term Capital Gain Time Duration of Asset Less than 36 months for regular More than 36 months for regular assets and 12 months for shares assets and 12 months for shares Tax Rate 15.00% 20.00% Computation Short term capital gains = sale cost Long term Capital Gains = cost of of asset – (expenditure incurred on asset) selling a property – Indexed cost of acquisition – (cost of acquisition/improvement)

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered over 2 years ago

> What is the difference between Long Term Capital Gains and Short Term Capital Gains ?> --Rhe sale of a capital asset will result in a capital gain. Depending on the holding period of this asset, the gain will either be short-term or long-term. Long-term gains have a lower, preferred income tax rate. --The holding period begins on the day the asset is purchased, as measured by the trade date, to the day the asset is sold. --If an asset is held for one year or less (36 months in case of other than shares and mutual funds), then sold for a gain, the short-term capital gain will be taxed at ordinary income tax rates. --If an asset is held for more than one year (36 months in case of other than shares and mutual funds), then sold for a gain, the long-term capital gain will be taxed at a maximum rate of 20% --To determine the amount of time which the asset was held, count the number of days from the date you purchased the asset through (including) the date you sold the asset.

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Open uri20170510 32134 nwqd3c?1494421745 NITESH SHARMA answered over 2 years ago

** Difference between Short term and Long term capital asset --------------------------------------------------------- ** Short-Term Capital Asset : -------------------------- Definition: ----------- Any capital asset held by the taxpayer for a period of not more than 36 months immediately preceding the date of its transfer will be treated as short-term capital asset. However, in respect of certain assets like shares (equity or preference) which are listed in a recognised stock exchange in India units of equity oriented mutual funds, listed securities like debentures and Government securities, Units of UTI and Zero Coupon Bonds, the period of holding to be considered is 12 months instead of 36 months. Tax Rate -------- : 15% Computation ----------- : Short term capital gains = sale cost of asset – (expenditure incurred on asset) – (cost of acquisition/improvement) ** Long term Capital Asset ----------------------- ** Definition: ---------- Any capital asset held by the taxpayer for a period of more than 36 months immediately preceding the date of its transfer will be treated as long-term capital asset. However, in respect of certain assets like shares (equity or preference) which are listed in a recognised stock exchange in India, units of equity oriented mutual funds, listed securities like debentures and Government securities, Units of UTI and Zero Coupon Bonds, the period of holding to be considered is 12 months instead of 36 months. Tax Rate: --------- 20% Computation ----------- : Long term Capital Gains = cost of selling a property – Indexed cost of acquisition Note: ----- Listing of shares is not mandatory if transfer of such shares took place on or before July 10, 2014.

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Open uri20170510 32134 ivjxpn?1494421728 Shreedhar Sutar answered over 2 years ago

Hi Renju M.r Gain arising on transfer of **Capital Asset** is charged to tax under the head “Capital Gains”. Income from capital gains is classified as **Short Term Capital Gains** and **Long Term Capital Gains**. Long Term Capital Gain means gains arising on transfer of "capital asset" held for more than 36 months before its transfer (more than 12 months in case of listed securities, units of UTI or equity-oriented mutual fund). Thus Short Term Capital Gain means gains arising on transfer of capital asset held for 36 months or less (12 months in case of listed securities, units of UTI or equity-oriented mutual fund). **Capital asset is defined to include** (a) Any kind of property held by an assesse, whether or not connected with business or profession of the assesse. (b) Any securities held by a FII which has invested in such securities in accordance with the regulations made under the SEBI Act, 1992. However, the following items are excluded from the definition of “capital asset”: i. any stock-in-trade (other than securities referred to in (b) above), consumable stores or raw materials held for the purposes of his business or profession; ii. personal effects, that is, movable property (including wearing apparel and furniture) held for personal use

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