ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -As per the Income Tax Act, any profit earned from capital assets such as stocks, Mutual Funds, Gold, Real Estate, etc., is termed “capital gain.” These capital gains are subject to tax depending on the type of investment.

Detailed explanation-2: -Capital gains are profits on an investment. When you sell investments at a higher price than what you paid for them, the capital gains are “realized” and you’ll owe taxes on the amount of the profit.

Detailed explanation-3: -Capital gains, dividends, and interest income Most investment income is taxable. But your exact tax rate will depend on several factors, including your tax bracket, the type of investment, and (with capital assets, like stocks or property) how long you own them before selling.

Detailed explanation-4: -There are some investments that will provide returns over a short period of time and there are those that provide returns over a longer period of time. These returns are known as long term capital gains and can include returns from investments like mutual funds, zero coupon government bonds etc.

Detailed explanation-5: -Capital gains and deductible capital losses are reported on Form 1040, Schedule D, Capital Gains and Losses, and then transferred to line 13 of Form 1040, U.S. Individual Income Tax Return.