{"id":10486,"date":"2018-07-24T13:19:01","date_gmt":"2018-07-24T07:49:01","guid":{"rendered":"https:\/\/www.antworksmoney.com\/blog\/?page_id=10486"},"modified":"2019-09-25T12:42:52","modified_gmt":"2019-09-25T07:12:52","slug":"difference-between-long-term-capital-gains-and-short-term-capital-gains","status":"publish","type":"post","link":"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/","title":{"rendered":"Difference between Long Term Capital Gains and Short Term Capital Gains"},"content":{"rendered":"

A capital asset includes any property or security owned by an individual, regardless of its connection to his\/her business. Securities which adhere to rules under the SEBI Act of 1992 classify as capital assets in India.<\/p>\n

The profits an individual makes from sale or transfer of a capital asset is termed Capital Gains and they attract a capital gains tax.<\/p>\n

Long Term Capital Assets vs Short Term Capital Assets:<\/h2>\n

Short term capital assets \u2013 Any asset owned by an individual (taxpayer) for less than 3 years since the date of transfer\/ownership is referred to as a short term capital asset. This duration should be less than 12 months in case of shares.<\/p>\n

Long term capital assets \u2013 Any asset owned by an individual (taxpayer) for more than 3 years since the date of transfer to his\/her name is treated as a long term capital asset. This duration is taken as 12 months or more in case of shares.<\/p>\n

\n

Short Term and Long Term Capital Gain:<\/h2>\n

Capital gain earned by an individual in lieu of transfer of a short term capital asset is termed as short term capital gain.<\/p>\n

Capital gain earned by an individual in lieu of transfer of a long term capital asset is termed as long term capital gain.<\/p>\n

Time Period:<\/strong><\/p>\n

Short term capital gains \u2013 This refers to gains arising out of sale\/transfer of assets within three years of ownership (in case of gold, property, etc) and 1 year of ownership in case of shares.<\/p>\n

Long term capital gains \u2013 This refers to gains arising out of sale\/transfer of assets after owning them for three years (in case of gold, property, etc) and more than 1 year in case of shares or mutual funds.<\/p>\n

Tax on Short Term Capital Gains and Long Term Capital Gains:<\/h2>\n

Short term capital gains which fall under section 111A are charged a tax of 15%, excluding surcharge and cess. Short term capital gains which are not covered under section 111A are charged tax at a rate determined by the total taxable income of the individual.<\/p>\n

Long term capital gains generally attract a tax of 20%, excluding cess and surcharge. This tax rate comes down to 10% if certain eligibility criteria are met by taxpayers and is applicable in terms of securities listed on a recognized stock market, UTI\/mutual fund and zero coupon bonds.<\/p>\n

Computation of Long Term and Short Term Capital Gain:<\/h2>\n

Long term capital gain is computed using indexed cost of acquisition\/improvement and is calculated as follows.<\/p>\n

(Cost of\u00a0<\/strong>acquisition<\/strong>\u00a0x cost inflation index of year of transfer of capital asset)\/(Cost inflation index of year of acquisition)<\/strong><\/p>\n

Long term Capital Gains = cost of selling a property \u2013 Indexed cost of acquisition<\/p>\n

Short term capital gains are easier to calculate, and one can determine it by subtracting the expenditure incurred on an asset from the cost of sale of that asset.<\/p>\n

Short term capital gains = sale cost of asset \u2013 (expenditure incurred on asset) \u2013 (cost of acquisition\/improvement)<\/p>\n

The table below highlights the basic differences between short term and long term capital gains.<\/p>\n\n\n\n\n\n\n
Parameter<\/th>\nShort Term Capital Gain<\/th>\nLong Term Capital Gain<\/th>\n<\/tr>\n
Time Duration of Asset<\/th>\nLess than 36 months for regular assets and 12 months for shares<\/td>\nMore than 36 months for regular assets and 12 months for shares<\/td>\n<\/tr>\n
Tax Rate<\/th>\n15.00%<\/td>\n20.00%<\/td>\n<\/tr>\n
Computation<\/th>\nShort term capital gains = sale cost of asset \u2013 (expenditure incurred on asset) \u2013 (cost of acquisition\/improvement)<\/td>\nLong term Capital Gains = cost of selling a property \u2013 Indexed cost of acquisition<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

A capital asset includes any property or security owned by an individual, regardless of its connection to his\/her business. Securities which adhere to rules under the SEBI Act of 1992 classify as capital assets in India. The profits an individual makes from sale or transfer of a capital asset is termed Capital Gains and they … Continue reading “Difference between Long Term Capital Gains and Short Term Capital Gains”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-10486","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\r\nAntworks Money – The Blog on Personal Finance | Guide to Loans, Credit Cards, Insurance and Investments<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:description\" content=\"A capital asset includes any property or security owned by an individual, regardless of its connection to his\/her business. Securities which adhere to rules under the SEBI Act of 1992 classify as capital assets in India. The profits an individual makes from sale or transfer of a capital asset is termed Capital Gains and they … Continue reading "Difference between Long Term Capital Gains and Short Term Capital Gains"\" \/>\r\n<meta property=\"og:url\" content=\"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/\" \/>\r\n<meta property=\"og:site_name\" content=\"Antworks Money - The Blog on Personal Finance | Guide to Loans, Credit Cards, Insurance and Investments\" \/>\r\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/antworksmoney\/\" \/>\r\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/antworksmoney\" \/>\r\n<meta property=\"article:published_time\" content=\"2018-07-24T07:49:01+00:00\" \/>\r\n<meta property=\"article:modified_time\" content=\"2019-09-25T07:12:52+00:00\" \/>\r\n<meta name=\"author\" content=\"Team Antworks\" \/>\r\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\r\n<meta name=\"twitter:creator\" content=\"@AntworksMoney\" \/>\r\n<meta name=\"twitter:site\" content=\"@AntworksMoney\" \/>\r\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Team Antworks\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\r\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/\"},\"author\":{\"name\":\"Team Antworks\",\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/#\/schema\/person\/99145cefcc01e42af38c385eeecef0b7\"},\"headline\":\"Difference between Long Term Capital Gains and Short Term Capital Gains\",\"datePublished\":\"2018-07-24T07:49:01+00:00\",\"dateModified\":\"2019-09-25T07:12:52+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/\"},\"wordCount\":579,\"publisher\":{\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/#organization\"},\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/\",\"url\":\"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/\",\"name\":\"\",\"isPartOf\":{\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/#website\"},\"datePublished\":\"2018-07-24T07:49:01+00:00\",\"dateModified\":\"2019-09-25T07:12:52+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.antworksmoney.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Difference between Long Term Capital Gains and Short Term Capital Gains\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/#website\",\"url\":\"https:\/\/www.antworksmoney.com\/blog\/\",\"name\":\"Antworks Money - The Blog on Personal Finance | Guide to Loans, Credit Cards, Insurance and Investments\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.antworksmoney.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/#organization\",\"name\":\"antworksmoney.com\",\"url\":\"https:\/\/www.antworksmoney.com\/blog\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.antworksmoney.com\/blog\/wp-content\/uploads\/2018\/03\/Logo-AntworksMoney.jpg\",\"contentUrl\":\"https:\/\/www.antworksmoney.com\/blog\/wp-content\/uploads\/2018\/03\/Logo-AntworksMoney.jpg\",\"width\":335,\"height\":328,\"caption\":\"antworksmoney.com\"},\"image\":{\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/antworksmoney\/\",\"https:\/\/twitter.com\/AntworksMoney\",\"https:\/\/www.linkedin.com\/company\/13288601\/\",\"https:\/\/in.pinterest.com\/antworksmoney\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/#\/schema\/person\/99145cefcc01e42af38c385eeecef0b7\",\"name\":\"Team Antworks\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.antworksmoney.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/6afb55cf81386baf97744c05fab72eb119a8574a923469f78eae31fde6ccac5f?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/6afb55cf81386baf97744c05fab72eb119a8574a923469f78eae31fde6ccac5f?s=96&d=mm&r=g\",\"caption\":\"Team Antworks\"},\"sameAs\":[\"https:\/\/www.antworksmoney.com\/\",\"https:\/\/www.facebook.com\/antworksmoney\",\"https:\/\/twitter.com\/@AntworksMoney\"],\"url\":\"https:\/\/www.antworksmoney.com\/blog\/author\/admin-2\/\"}]}<\/script>\r\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Antworks Money – The Blog on Personal Finance | Guide to Loans, Credit Cards, Insurance and Investments","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/","og_locale":"en_US","og_type":"article","og_description":"A capital asset includes any property or security owned by an individual, regardless of its connection to his\/her business. Securities which adhere to rules under the SEBI Act of 1992 classify as capital assets in India. The profits an individual makes from sale or transfer of a capital asset is termed Capital Gains and they … Continue reading \"Difference between Long Term Capital Gains and Short Term Capital Gains\"","og_url":"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/","og_site_name":"Antworks Money - The Blog on Personal Finance | Guide to Loans, Credit Cards, Insurance and Investments","article_publisher":"https:\/\/www.facebook.com\/antworksmoney\/","article_author":"https:\/\/www.facebook.com\/antworksmoney","article_published_time":"2018-07-24T07:49:01+00:00","article_modified_time":"2019-09-25T07:12:52+00:00","author":"Team Antworks","twitter_card":"summary_large_image","twitter_creator":"@AntworksMoney","twitter_site":"@AntworksMoney","twitter_misc":{"Written by":"Team Antworks","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/#article","isPartOf":{"@id":"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/"},"author":{"name":"Team Antworks","@id":"https:\/\/www.antworksmoney.com\/blog\/#\/schema\/person\/99145cefcc01e42af38c385eeecef0b7"},"headline":"Difference between Long Term Capital Gains and Short Term Capital Gains","datePublished":"2018-07-24T07:49:01+00:00","dateModified":"2019-09-25T07:12:52+00:00","mainEntityOfPage":{"@id":"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/"},"wordCount":579,"publisher":{"@id":"https:\/\/www.antworksmoney.com\/blog\/#organization"},"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/","url":"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/","name":"","isPartOf":{"@id":"https:\/\/www.antworksmoney.com\/blog\/#website"},"datePublished":"2018-07-24T07:49:01+00:00","dateModified":"2019-09-25T07:12:52+00:00","breadcrumb":{"@id":"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.antworksmoney.com\/blog\/difference-between-long-term-capital-gains-and-short-term-capital-gains\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.antworksmoney.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Difference between Long Term Capital Gains and Short Term Capital Gains"}]},{"@type":"WebSite","@id":"https:\/\/www.antworksmoney.com\/blog\/#website","url":"https:\/\/www.antworksmoney.com\/blog\/","name":"Antworks Money - The Blog on Personal Finance | Guide to Loans, Credit Cards, Insurance and Investments","description":"","publisher":{"@id":"https:\/\/www.antworksmoney.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.antworksmoney.com\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.antworksmoney.com\/blog\/#organization","name":"antworksmoney.com","url":"https:\/\/www.antworksmoney.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.antworksmoney.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/www.antworksmoney.com\/blog\/wp-content\/uploads\/2018\/03\/Logo-AntworksMoney.jpg","contentUrl":"https:\/\/www.antworksmoney.com\/blog\/wp-content\/uploads\/2018\/03\/Logo-AntworksMoney.jpg","width":335,"height":328,"caption":"antworksmoney.com"},"image":{"@id":"https:\/\/www.antworksmoney.com\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/antworksmoney\/","https:\/\/twitter.com\/AntworksMoney","https:\/\/www.linkedin.com\/company\/13288601\/","https:\/\/in.pinterest.com\/antworksmoney"]},{"@type":"Person","@id":"https:\/\/www.antworksmoney.com\/blog\/#\/schema\/person\/99145cefcc01e42af38c385eeecef0b7","name":"Team Antworks","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.antworksmoney.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/6afb55cf81386baf97744c05fab72eb119a8574a923469f78eae31fde6ccac5f?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/6afb55cf81386baf97744c05fab72eb119a8574a923469f78eae31fde6ccac5f?s=96&d=mm&r=g","caption":"Team Antworks"},"sameAs":["https:\/\/www.antworksmoney.com\/","https:\/\/www.facebook.com\/antworksmoney","https:\/\/twitter.com\/@AntworksMoney"],"url":"https:\/\/www.antworksmoney.com\/blog\/author\/admin-2\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.antworksmoney.com\/blog\/wp-json\/wp\/v2\/posts\/10486","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.antworksmoney.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.antworksmoney.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.antworksmoney.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.antworksmoney.com\/blog\/wp-json\/wp\/v2\/comments?post=10486"}],"version-history":[{"count":1,"href":"https:\/\/www.antworksmoney.com\/blog\/wp-json\/wp\/v2\/posts\/10486\/revisions"}],"predecessor-version":[{"id":10487,"href":"https:\/\/www.antworksmoney.com\/blog\/wp-json\/wp\/v2\/posts\/10486\/revisions\/10487"}],"wp:attachment":[{"href":"https:\/\/www.antworksmoney.com\/blog\/wp-json\/wp\/v2\/media?parent=10486"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.antworksmoney.com\/blog\/wp-json\/wp\/v2\/categories?post=10486"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.antworksmoney.com\/blog\/wp-json\/wp\/v2\/tags?post=10486"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}