Capital Gains | Section 54 | Direct Taxation | Sep 2020 Dec 2020 with amendments | CMA | CA | CS |

Capital gain is an economic concept defined as the profit earned on the sale of an asset which has increased in value over the holding period. An asset may include tangible property, a car, a business, or intangible property such as shares.What are examples of capital gains? The term capital gain, or capital gains, is used to describe the profit earned from buying something at one price and selling it at a different, higher price. For instance, if you bought a piece of real estate for $500,000 and sold it for $800,000, you would need to report total capital gains of $300,000. .Five Ways to Minimize or Avoid Capital Gains Tax Invest for the long term. ... Take advantage of tax-deferred retirement plans. ... Use capital losses to offset gains. ... Watch your holding periods. ... Pick your cost basis.At what point do you pay capital gains? If you sell a capital asset you owned for one year or less, you will pay tax at your ordinary income tax rate. For example, say you sold stock at a profit of $10,000. You held the stock for six months. If your federal income tax rate is 25 percent, you'll owe about $2,500 in tax on your short-term capital gain.What triggers capital gains? While capital gains are generally associated with stocks and funds due to their inherent price volatility, a capital gain can occur on any security that is sold for a price higher than the purchase price that was paid for it. Realized capital gains and losses occur when an asset is sold, which triggers a taxable event.Is capital gains tax going up in 2021? Aside from annual inflation adjustments, there aren't any significant capital gains tax changes on tap for 2021.