New Delhi, May 22 -- Capital gains tax is levied on the profit earned from the sale of capital assets such as land, buildings, stocks, virtual digital assets and other investments. In India, long-term capital gains (LTCG) are generally taxed at 12.5%, while short-term capital gains (STCG) on certain assets attract a flat 20% tax.

Capital gains tax is charged on the profit earned when a capital asset is sold at a price higher than its purchase cost. The tax applies only to the gain from the transaction, not to the total sale amount.

If an asset is sold at a profit, it results in a capital gain. If it is sold at a price lower than the purchase cost, it results in a capital loss. Capital gains are taxable in the financial year in which the...