Why Capital Gains Are Classified As Short-term And Long-term?

1.	Why Capital Gains Are Classified As Short-term And Long-term?
Answer» The taxability of capital GAIN depends on the nature of gain, i.e. whether short-term or long-term. Hence to determine the taxability, capital GAINS are CLASSIFIED into short-term capital gain and long-term capital gain. In other words, the tax rates for long-term capital gain and short-term capital gain are different. SIMILARLY, computation provisions are different for long-term capital gains and short-term capital gains. The taxability of capital gain depends on the nature of gain, i.e. whether short-term or long-term. Hence to determine the taxability, capital gains are classified into short-term capital gain and long-term capital gain. In other words, the tax rates for long-term capital gain and short-term capital gain are different. Similarly, computation provisions are different for long-term capital gains and short-term capital gains.

Answer»

The taxability of capital GAIN depends on the nature of gain, i.e. whether short-term or long-term. Hence to determine the taxability, capital GAINS are CLASSIFIED into short-term capital gain and long-term capital gain. In other words, the tax rates for long-term capital gain and short-term capital gain are different. SIMILARLY, computation provisions are different for long-term capital gains and short-term capital gains.

The taxability of capital gain depends on the nature of gain, i.e. whether short-term or long-term. Hence to determine the taxability, capital gains are classified into short-term capital gain and long-term capital gain. In other words, the tax rates for long-term capital gain and short-term capital gain are different. Similarly, computation provisions are different for long-term capital gains and short-term capital gains.

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