ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Capital gain is denoted as the net profit that an investor makes after selling a capital asset exceeding the price of purchase. The entire value earned from selling a capital asset is considered as taxable income.

Detailed explanation-2: -If your shares pay dividends, that would be considered one type of investment income. If you later sell the shares at a profit, the difference between the sales price and your basis (i.e., what you paid for the shares) is a capital gain-another type of investment income.

Detailed explanation-3: -Investment Income: “Investment income” includes interest, rents, royalties, dividends, capital gains, and other income derived from an asset.

Detailed explanation-4: -A capital gain is the increase in a capital asset’s value and is realized when the asset is sold. Capital gains apply to any type of asset, including investments and those purchased for personal use. The gain may be short-term (one year or less) or long-term (more than one year) and must be claimed on income taxes.

Detailed explanation-5: -Capital gains If you sell an asset for more than you paid for it, your profit (minus your cost basis) is called a capital gain. Short-term capital gains are profits from selling assets you own for a year or less. They’re usually taxed at ordinary income tax rates (10%, 12%, 22%, 24%, 32%, 35%, or 37%).