Long Term and Short-Term Capital Gains

Long Term and Short-Term Capital Gains

 

People these days are more involved in purchase and sale of properties. The profit or gain arising from sale of these capital assets such as house property, land, buildings shares, bonds, jewelry during a financial year will be charged under the head “income from capital gains”.

 

 

Examples for Short-term & Long-term capital assets are given below:

  • Ramesh is a salaried employee. In the month of April, 2019, he purchased a piece of land and sold the same in December, 2020. In this case land is a capital asset for Mr. Ramesh. He purchased land in April, 2019 and sold it in December, 2020, i.e., holding it for a period of less than 24 months. Hence, land will be treated as short-term capital asset.
  • Suresh is a salaried employee. In the month of April, 2019, he purchased equity shares of SBI Ltd. (listed in BSE) and sold the same in December, 2020. In this case shares are capital assets for Mr. Rakesh. He purchased shares in April, 2019 and sold them in December, 2020, i.e., after holding them for a period of more than 12 months. Hence, shares will be treated as long-term capital assets.

 

Disclaimer: The above-mentioned cases are illustrative and not exhaustive. This article is only for discussing general issues and hereby we do not express any opinion or give any consultation in whatsoever manner understood. The cases may differ from assessee to assessee. We recommend you to take expert advice depending upon your particular case.

 

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