Long Term/Short Term Capital Gain
Capital Gain (u/s 48) means any profit or gain arising from the sale/transfer of a Capital Asset.
Capital Asset means property of any kind held by an Assessee. However, it does not include:
(1) Stock, Stores, Raw materials held in business
(2) Gold Bonds
(3) Rural Agricultural Land
(4) Personal effects like Furniture, Motor Car,A/C, Refrigerator etc.
“Jewelery” held for personal use is treated as Capital Asset. Jewelery includes ornaments made of Gold, Silver, Platinum or any other Precious Metal/Stone.
Capital Assets are of two types:
1. Long term Capital Assets
2. Short term Capital Assets
The nature of the Asset and the period of holding determine whether it is a Long term Asset or a Short term one as given below.
Nature of Asset : Shares of a company, Units of UTV/ Mutual Fund.
LONG TERM Capital Asset : When held for more than 12 months.
SHORT TERM Capital Asset : When held for less than 12 months.
Nature of Asset : All other Assests (other than above).
LONG TERM Capital Asset : When held for more than 36 months
SHORT TERM Capital Asset : When held for less than 36 months