{"id":23112,"date":"2024-05-06T08:19:57","date_gmt":"2024-05-06T02:49:57","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=23112"},"modified":"2025-04-07T00:19:20","modified_gmt":"2025-04-06T18:49:20","slug":"capital-gains-tax","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/capital-gains-tax\/","title":{"rendered":"What is Capital Gains Tax (CGT)?"},"content":{"rendered":"<h2>About Capital Gains Tax (CGT):<strong>\u00a0<\/strong><\/h2>\n<ul>\n<li>The term <strong>capital gains<\/strong> can be defined as <strong>profits accumulated from the sale of<\/strong> any <strong>capital asset.<\/strong>\n<ul>\n<li><strong>Land, buildings<\/strong>, <strong>house<\/strong> property, <strong>vehicles<\/strong>, <strong>patents<\/strong>, <strong>trademarks<\/strong>, <strong>leasehold rights<\/strong>, <strong>machinery<\/strong>, and <strong>jewellery<\/strong> are a few examples of capital assets.<\/li>\n<li>This includes having <strong>rights in<\/strong> or in relation to <strong>an Indian company<\/strong>.<\/li>\n<li>It also includes the<strong> rights of management<\/strong>, <strong>control,<\/strong> or any other legal right.\u00a0<\/li>\n<\/ul>\n<\/li>\n<li>Depending on the duration, capital gains can either be<strong> short-term or long-term.<\/strong><\/li>\n<li>Since profits are categorised as an \u2018income\u2019, they are <strong>liable for taxation<\/strong>, which is <strong>known as CGT.<\/strong><\/li>\n<li>Such taxes are <strong>levied when an asset<\/strong> is <strong>transferred between owners<\/strong>.<\/li>\n<li>This tax <strong>applies to both individuals and businesses.<\/strong><\/li>\n<li>Taxpaying individuals <strong>can use tax-efficient financial strategies to reduce<\/strong> the burden of their <strong>CGT.<\/strong><\/li>\n<li>There are<strong> two types of CGT: <\/strong>Short-term <strong>CGT<\/strong> and Long-term <strong>CGT<\/strong><\/li>\n<li><strong>Short-term CGT:<\/strong>\n<ul>\n<li>Any <strong>asset<\/strong> that is <strong>held for less than 36 months<\/strong> is termed as a short-term asset.<\/li>\n<li><strong>In the case of immovable properties<\/strong>, the duration is <strong>24 months.<\/strong><\/li>\n<li>The profits generated through the sale of such an asset would be treated as short-term capital gain and would be taxed accordingly.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Long-term CGT:<\/strong>\n<ul>\n<li>Any <strong>asset<\/strong> that is <strong>held for over 36 months<\/strong> is termed as a long-term asset.<\/li>\n<li><strong>Assets like preference shares, equities, UTI units<\/strong>, <strong>securities<\/strong>, <strong>equity-based Mutual Funds<\/strong> and <strong>zero-coupon bonds<\/strong> are also considered as long-term capital asset if they are <strong>held for over a year<\/strong>.<\/li>\n<li>The profits generated through the sale of such an asset would be treated as long-term capital gain and would attract tax accordingly.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<hr \/>\n<h3>Q1: What are preference shares?<\/h3>\n<p>Preference shares, more commonly referred to as preferred stock, are shares of a company\u2019s stock with dividends that are paid out to shareholders before common stock dividends are issued. If the company enters bankruptcy, preferred stockholders are entitled to be paid from company assets before common stockholders.<\/p>\n<p><strong>Source:<\/strong> <a href=\"https:\/\/www.business-standard.com\/markets\/news\/fm-s-clarification-on-capital-gains-tax-could-see-markets-recover-on-monday-124050400291_1.html\" target=\"_blank\" rel=\"nofollow noopener\">FM&#8217;s clarification on capital gains tax could see markets recover on Monday<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Capital Gains Tax (CGT) is levied on profits accumulated from the sale of any capital asset.<\/p>\n","protected":false},"author":5,"featured_media":23113,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-23112","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/23112","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=23112"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/23112\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/23113"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=23112"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=23112"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=23112"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}