Capital Gains
A capital gain is the profit earned when an investor or trader sells assets like shares, commodities, futures, options, or currencies for more than their purchase price. Essentially, it’s the gain on invested capital—thus the term 'capital gains.' For example, if someone buys a share for Rs. 1000 and sells it for Rs. 1100, the capital gain is Rs. 100. Taxation on these gains depends on the asset type and holding period. In India, short-term and long-term capital gains are taxed differently, with rates varying based on the asset and duration before the sale.
Related Terms
Index Arbitrage
Index arbitrage is a trading strategy that aims to generate returns by exploiting short-term price...
Illiquid Asset
An illiquid asset is an asset that cannot be quickly or easily converted into cash...
IPO
An IPO (Initial Public Offering) is the process through which a private company becomes publicly...
Fair Value
Fair value is the mutually agreeable price for a stock, product, or service, ensuring neither...
Direct Public Offerings
A Direct Public Offering (DPO) enables a company to sell shares directly to the public,...
Best Efforts Underwriting/Offering
A best efforts underwriting is an arrangement where the underwriter agrees to market and sell...
