What is Capital gain? Long term and Short Term Capital
If you are an investor, then the first step required is to build an investment portfolio, in sync with your financial goals and risk appetite. You must also have a thorough understanding of the market. This requires knowing about the key concepts, like what is capital gain? Read on to know more about capital gain – an essential concept for all investors and traders.
What is capital gain?
- Whenever you sell capital assets, like real estate, stocks, bonds etc. you either make a profit or a loss. If the sale price of your capital assets is more than its purchase price, the profit is known as capital gain. Conversely, a loss in such a transaction is called capital loss. To put it simply, capital gain is the profit accruing to you from the sale of your capital assets. For instance, if you purchase 100 shares of a company with the face value of Rs 10 each, you have invested a total of Rs 1,000. If the price of the share increases after some time and you sell it at Rs 20 each, you have earned Rs 1,000 as profits. This amount will be categorised as a capital gain.
- Capital gains can be both realised and unrealised. When you make profits from actual sale of capital assets, it is known as realised capital gain. This, in turn, is subject to taxation. Unrealised capital gain, on the other hand, is the profit that will accrue to you in the case of a particular asset being sold at a future point of time.
Key Features:
Minimum investment of Rs10,000 and in multiples of Rs10,000 thereafter
Interest Payment: Semi Annual, Annual or Cumulative
Lock-in-period of 3 years for all the structures
No TDS on Interest payable for Resident Investors
Rating from CARE
Rate of Interest: Due to frequent change in the rate of interest, investors are requested to check the same before investing
NRIs, OCBs or FIIs are eligible to invest on non-repatriation basis
