Capital gains
Regulation & taxProfit realised on selling an asset, taxed by holding period.
In plain terms
Equity held over a year is taxed more favourably than under. Every switch resets the clock.
1678 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Capital Gains Account Scheme
Regulation & taxAlso called: CGAS
A specified bank account into which the unutilised part of a gain must be deposited before the due date for filing the return, to keep a reinvestment exemption alive until the purchase or construction is completed.
In plain terms
The deadline is for getting the money in, not for spending it. Buying the house comfortably inside the two-year window does not rescue a deposit that was never made, and money left visibly untouched in a savings account or a fixed deposit is not a deposit under the scheme.
Capital gains bonds
Regulation & taxAlso called: 54EC bonds
The specified bonds, subscribed within six months of the transfer and locked in for five years, that carry the section 54EC exemption — available only where the gain arose on land or a building.
In plain terms
The route every Indian property seller has heard of, and it is closed to a gain on shares or units because of what the provision requires the source asset to be. There is also a prescribed annual ceiling well below the size of many property gains.
Capital gains statement
Regulation & taxThe financial-year statement a broker produces listing every sale, split into short-term and long-term with the cost basis already computed.
In plain terms
Your primary source at filing time and usually a two-click download. Reconcile it against the AIS before you submit anything.
Capital gains tax
Regulation & taxTax on profit realised from selling an asset.
In plain terms
A reason to trim gradually and use the annual exemption — not a reason to hold indefinitely.
ITR
Regulation & taxAlso called: Income tax return
The income tax return — ITR-1 for salary alone, ITR-2 once there are capital gains from shares or funds, ITR-3 where intraday or F&O activity makes it business income.
In plain terms
Delivery trades produce capital gains; intraday and F&O produce business income, taxed at slab and carrying audit thresholds. A few casual intraday trades genuinely change which form you file.
Loss set-off
Regulation & taxUsing a realised capital loss to reduce taxable capital gains, under rules governing which kind of loss may offset which kind of gain.
In plain terms
Short-term losses are the flexible kind, offsetting both short-term and long-term gains. A long-term loss offsets only long-term.
LTCG
Regulation & taxLong-term capital gains — profits on listed equity held over twelve months, taxed at 12.5% above a ₹1.25 lakh annual exemption.
In plain terms
Many investors deliberately harvest gains up to the exemption limit each year.
STCG
Regulation & taxShort-term capital gains — profits on listed equity held twelve months or less, taxed at 20%.
In plain terms
Two extra months of patience can be worth 20% of your gain.
Intraday
Trading & ordersAlso called: Intraday trading
Positions opened and closed within the same trading session.
In plain terms
Taxed as business income at your slab rate, not as capital gains.
Scheme merger
Market basicsThe combining of one mutual fund scheme into another, after which unitholders hold units of the surviving scheme.
In plain terms
A change in fundamental attributes, so it arrives as a written notice with a no-load exit window. The waiver covers the load, not the capital gains tax, which is usually the larger number.
SWP
Market basicsSystematic Withdrawal Plan — a fixed amount redeemed from a fund at regular intervals.
In plain terms
More tax-efficient than dividends: only the gain portion is taxed, and at capital gains rates.