The budget has given a big shock to the stock market investors. Under capital gains tax, long term capital gains have been increased from 2.50 percent to 12 percent. At the same time, short term capital gains tax (STCG) on selected assets has been increased to 20 percent. Meanwhile, a huge decline is being seen in the market.
How much is capital gains tax now?
Capital gains tax is levied in two ways in the stock market. If a stock is sold within 1 year, then the profit made on it is subject to short term capital gains tax, which is levied on the basis of your tax slab. At the same time, if the stock is sold after 1 year, long term capital gains tax is applicable. In this, profit up to Rs 1 lakh will be out of the scope of tax, while profit above this will have to be taxed at the rate of 10 percent.
What is capital gains tax?
The tax imposed on profits made from capital is called capital gains tax. There are two types of short term capital gains and long term capital gains tax. Short term capital gains are taxed at 15 per cent and long term capital gains are taxed at 10 per cent. No tax has to be paid on annual capital gains up to Rs 1 lakh.