27/10/2022
LTCG and STCG are discussed in greater detail below, as well as the tax consequences of these gains.
Long term capital gain tax
Investment options that have been held for more than a year at the time of the asset’s sale are eligible for long-term capital gains. It is based on the difference between the sale and purchase prices of assets that have been owned for more than a year. In other words, this profit is the net profit that investors receive when selling this asset.
Listing equity shares are included in qualifying investment options that generate long-term capital gain (LTCG) over a period of 12 months. To be considered a long-term capital asset, an unlisted equity share must have a holding period of at least 24 to 36 months.
Short term capital gain tax
A capital gain is a profit realized through the sale, transfer, or disposition of an investment property or asset. The profit generated from the sale of these properties is referred to as short-term capital gain if the holding period is less than 12 months (in some cases 36 or 24 months).
Short-term investment in equity shares is defined as a period of less than 12 months (or 36 months) in duration. To calculate short-term capital gains, the difference between a share’s purchase price and its sale value is known as its basis. To understand the tax consequences of a share’s gains, it’s important to calculate them.
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