Capital Gains Tax 

The Union Budget 2024-25 has raised taxation on income from capital gains.

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Key Terms  

• Capital assets: Investments in farms, bonds, shares, businesses, art,  land, home, vehicle, trademark, machinery and Jewellery etc. 
• Capital Gains Tax: It is a  tax imposed on the sale of an asset. It is calculated based on the difference between sale price and purchasing price of the asset. 
• Capital gain can be classified as short term and long term based on holding duration.  
• Holding periods: for listed securities-1 year, for all other assets-2 years 
• The rate on short-term capital gains has been hiked to 20% from 15%.  
• It is a direct tax that is paid due to the income that is gained from the sale of assets or investments.