{"id":2473,"date":"2012-08-03T21:21:34","date_gmt":"2012-08-03T15:51:34","guid":{"rendered":"http:\/\/www.apnaplan.com\/?p=2473"},"modified":"2014-06-18T09:31:29","modified_gmt":"2014-06-18T04:01:29","slug":"long-term-vs-short-term-capital-gains-for-equity-debt-gold-real-estate","status":"publish","type":"post","link":"https:\/\/www.apnaplan.com\/long-term-vs-short-term-capital-gains-for-equity-debt-gold-real-estate\/","title":{"rendered":"Long Term VS Short Term Capital Gains for Equity, Debt, Gold & Real Estate"},"content":{"rendered":"

We all invest in equity, debt, gold, & real estate according to our risk profile and time horizon. The gains from these investments are treated as capital gains and are taxed differently<\/strong>. As tax liability impacts your net returns, so it\u2019s imperative that you should know about them.<\/p>\n

Capital gains are classified as long term and short term depending on asset class and investment time horizon. For e.g. If you sell your real estate investment after three years the gains you make is Long term capital gain while in case of equities, you need to hold the investment for at least a year to be classified as long term capital gains.<\/p>\n

Let\u2019s see both types of capital gains one by one:<\/p>\n

Long Term Capital Gains:<\/h2>\n

The table below shows the holding period for long term gains in various asset classes and the applicable tax rate:<\/p>\n\n\n\n\n\n\n\n\n\n\n
Asset<\/strong><\/td>\nMinimum holding period\u00a0<\/strong>for Long Term Capital Gains<\/strong><\/td>\nTaxation<\/strong><\/td>\n<\/tr>\n
Equity<\/strong><\/td>\n1 Year<\/td>\nNo Tax<\/td>\n<\/tr>\n
Debt<\/strong><\/td>\n1 Year<\/td>\nMinimum of following two<\/p>\n
    \n
  • 10% without indexation<\/li>\n
  • 20% with indexation<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Bonds\/ NCDs<\/strong><\/td>\n1 Year<\/td>\n<\/tr>\n
Gold ETF & Gold Mutual Fund<\/strong><\/strong><\/td>\n1 Year<\/td>\n<\/tr>\n
Gold (Physical)<\/strong><\/td>\n3 Years<\/td>\n20% with indexation benefit<\/td>\n<\/tr>\n
Real Estate<\/strong><\/td>\n3 Years<\/td>\n<\/tr>\n
Education Cess of 3% is applicable on all taxes above<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

As you can see from the table above equities enjoy zero taxability on long term capital gains while in real estate or physical gold investment you have to pay a flat rate. Further there are provisions in income tax through which you can reduce your long term capital gains tax liability which would be covered in other post.<\/p>\n

Short Term Capital Gains:<\/h2>\n

The table below shows the holding period for long term gains in various asset classes and the applicable tax rate:<\/p>\n\n\n\n\n\n\n\n\n\n\n
Asset<\/strong><\/td>\nMinimum holding period\u00a0<\/strong>for Short Term Capital Gains<\/strong><\/td>\nTaxation<\/strong><\/td>\n<\/tr>\n
Equity<\/strong><\/td>\nLess than 1 Year<\/td>\n15%<\/td>\n<\/tr>\n
Debt<\/strong><\/td>\nLess than 1 Year<\/td>\nAdded to income and taxed at marginal income tax rate<\/td>\n<\/tr>\n
Bonds\/ NCDs<\/strong><\/td>\nLess than 1 Year<\/td>\n<\/tr>\n
Gold (Physical)<\/strong><\/td>\nLess than 3 Years<\/td>\n<\/tr>\n
Gold ETF & Gold Mutual Fund<\/strong><\/td>\nLess than 1 Year<\/td>\n<\/tr>\n
Real Estate<\/strong><\/td>\nLess than 3 Years<\/td>\n<\/tr>\n
Education Cess of 3% is applicable on all taxes above<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

As you can see from the table above in case of equities you need to pay flat 15% of your gains as tax while the gains in case of real estate or physical gold, the gain is added to your income and taxed at marginal personal income tax rate.<\/p>\n

Next time when you plan to invest in\u00a0Equity, Debt, Gold or Real Estate – keep in mind the taxation part!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

We all invest in equity, debt, gold, & real estate according to our risk profile and time horizon. The gains from these investments are treated as capital gains and are taxed differently. As tax liability impacts your net returns, so it\u2019s imperative that you should know about them. Capital gains are classified as long term […]<\/p>\n","protected":false},"author":1,"featured_media":4772,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[6],"tags":[938,937,701,2831,750,939,2809,749,940,65],"uagb_featured_image_src":{"full":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2012\/08\/Capital-Gains-Tax.png",485,458,false],"thumbnail":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2012\/08\/Capital-Gains-Tax-150x150.png",150,150,true],"medium":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2012\/08\/Capital-Gains-Tax-300x283.png",300,283,true],"medium_large":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2012\/08\/Capital-Gains-Tax.png",485,458,false],"large":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2012\/08\/Capital-Gains-Tax.png",485,458,false],"1536x1536":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2012\/08\/Capital-Gains-Tax.png",485,458,false],"2048x2048":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2012\/08\/Capital-Gains-Tax.png",485,458,false],"yarpp-thumbnail":["https:\/\/www.apnaplan.com\/wp-content\/uploads\/2012\/08\/Capital-Gains-Tax.png",120,113,false]},"uagb_author_info":{"display_name":"Amit","author_link":"https:\/\/www.apnaplan.com\/author\/admin\/"},"uagb_comment_info":1,"uagb_excerpt":"We all invest in equity, debt, gold, & real estate according to our risk profile and time horizon. The gains from these investments are treated as capital gains and are taxed differently. As tax liability impacts your net returns, so it\u2019s imperative that you should know about them. Capital gains are classified as long term…","_links":{"self":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts\/2473"}],"collection":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/comments?post=2473"}],"version-history":[{"count":0,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/posts\/2473\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/media\/4772"}],"wp:attachment":[{"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/media?parent=2473"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/categories?post=2473"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.apnaplan.com\/wp-json\/wp\/v2\/tags?post=2473"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}