Capital gain tax is chargeable when the capital asset is sold by the assesse during relevant previous year.
The capital asset has been defined under Sec 2(14) of the Income Tax Act which says:
"Capital asset means property of any kind (movable, immovable, fixed, circulating) held by the assessee during the relevant previous year. It excludes stock in hand, personal effects (excluding jewelry . archaeological collections, paintings, works of art).
Tax on Short-Term and Long-Term Capital Gains
- Tax on long-term capital gain: the Long-term capital gain is taxable at 20% + surcharge and education cess.
- Tax on the short-term capital gain when securities transaction tax is not applicable: If securities transaction tax is not applicable, the short-term capital gain is added to your income tax return and the taxpayer is taxed according to his income tax slab.
- Tax on the short-term capital gain if securities transaction tax is applicable: If securities transaction tax is applicable, the short-term capital gain is taxable at the rate of 15% +surcharge and education cess.
- Tax on the Long-term capital gain if securities transaction tax is applicable: Exempt u/s 10(38)
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