Distinguish between Short-term capital gain and Long term capital gain.

Distinction between short-term capital gain and Long term capital gain :

Capital gain arising from the transfer of along -term capital asset is along-term capital gain and that arising from the transfer of short-term capital asset is short-term capital gain. Long-term capital gain is chargeable to tax at special rats (it is 20% of the assessment year 2015-16) whereas short-term capital gain forms part of total income of an assesses and is charged to tax at the rate/rates applicable to person concerned.

Shot term capital losses can be set-off against short-term or long-term capital gain whereas long-term capital losses can be set-off only against. Long-term gains. Long-term capital gains are exempt subject to certain conditions. However short-term capital gain are not given such exemptions.

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