Definition: Capital gain is the profit one earns on the sale of an asset like stocks, bonds or real estate. It results in capital gain when the selling price of an asset exceeds its purchase price.

Are there taxes imposed on capital gains explain?

Capital gains are generally included in taxable income, but in most cases, are taxed at a lower rate. A capital gain is realized when a capital asset is sold or exchanged at a price higher than its basis. Basis is an asset’s purchase price, plus commissions and the cost of improvements less depreciation.

How are capital gains taxed in the United States?

An exception is when the amount of the gain happens to push you into a higher marginal tax bracket. The same applies to dividends paid by an asset, which aren’t capital gains but do represent a profit. In the U.S., dividends are taxed as ordinary income for taxpayers who are in the 15% and higher tax brackets. 2 

How are short term and long term capital gains taxed?

Short-term gains for stocks and mutual funds are taxed at 15%. Short-term capital gain on debt mutual funds is taxed as per the income slab of the individual. Long-term capital gains on debt mutual funds are taxed at 20% with indexation and at 10% without indexation.

When do you not have to pay income tax on capital gains?

Income tax exemption is applicable on the long-term gain which occurs from the sale of a capital asset under section 54 and 54F of IT Act if the investment is made in construction and purchase of house property, subject to specific conditions.

Which is the tax rate for capital gains in India?

The capital gains tax in India, under Union Budget 2018, 10% tax is applicable on the Long Term Capital Gains (LTCG) on sale of listed securities above Rs.1lakh and the STCG are taxed at 15%. Besides this, the both long term and short term capital gains are taxable in case of debt mutual funds.