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3. WHAT DO YOU UNDERSTAND BY THE TERM”CAPITAL GAINS”
USED IN THE INCOME TAX ACT? WHAT ARE THE RULES REGARDING
EXEMPTION OF CAPITAL GAINS.

Answer Posted / srinivas annavarapu

A capital gain is a profit made out of selling a non-
inventory capital asset like Land & buildings, bonds,
stocks etc.

In India longterm capital gains (equity held for more than
one year are exempted from tax if they are sold through a
recognised stock exchange and STT is paid on the sale.

and short term capital gains are taxed at 15%(equity) and
can be reduced against short term capital loss and others
are taxed at the same rate as any other income.

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