Income Tax Expert Interview Question:

Explain me what is capital gain? Explain long term capital gains and how is it different from short term capital gains?

Submitted by: Muhammad

1. Capital gains' means the profit earned from the sale of an asset. When the Capital Asset is being sold or transferred, the profit or gains arising out of it or you can term that as the difference between the actual price at which the asset was acquired and the price at which it is sold or transferred.
2. A long-term capital gain is the profit that arises with the sale of an asset that has been on hold for a definite period. This period ranges from one year to three years across different asset classes.
3. It is different from short term capital gains because short term capitals are kept for short period only that is less than a years.
Submitted by: Muhammad