Capital Gain is the profit you earn when you sell an asset like land, house, shares, or gold at a higher price than you bought it.
🔺 If you sell it at a loss, it is called a Capital Loss.
🔺Capital Gains are taxed under the Income Tax Act, 1961.

What is a Capital Asset?
A Capital Asset means any property or investment you own, like:
✅ Land and Building
✅ House Property
✅ Shares, Mutual Funds
✅ Jewellery
✅ Goodwill, Trademarks

❌ What is Not a Capital Asset?
❗ Personal items like clothes, furniture (except jewellery)
❗Agricultural land in a rural area
❗Items you use for your business (stock-in-trade)

✅ Types of Capital Gains

🔸 Short-Term Capital Gain (STCG)
🔹 Profit from selling a short-term asset
🔹Taxed at 15% for listed shares
🔹Taxed at normal slab rate for other assets

🔸 Long-Term Capital Gain (LTCG)
🔹Profit from selling a long-term asset
🔹Taxed at 10% (shares, mutual funds – if gain exceeds ₹1 lakh)
🔹Taxed at 20% with indexation for other assets

Capital Loss Rules
1. Short-term loss can be set off against any capital gain
2. Long-term loss can be set off only against LTCG
3. Losses can be carried forward for 8 years

✅ How to Report Capital Gains?
✔️ Show them in your Income Tax Return (ITR) under the Capital Gains section
✔️Use ITR-2 or ITR-3, depending on other income

⚠️ Documents to keep:
Sale deed, purchase deed
Brokerage receipts
Valuation report (if applicable)
Proof of reinvestment (for exemptions)

Types of Capital Assets (Based on Holding Period)