Stock Market Investors » Glossary of Stock Terms » What is Capital Gain?

What is Capital Gain?

Generally, capital gain represents the profits you get when you sell a particular investment. Basically, there are two types of capital gain: short-term and long-term.

Short-term capital gain is acquired when you sell a stock you have held for less than a year. Such short-term capital gain is subject to a tax level that is usual for the ordinary income of the holder of the stock.

Long-term capital gain is acquired when you sell a stock you have held for more than a year. In such a case the holder of the stock is liable to 20% tax.

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