What is Short-Term Capital Gains on shares? How to calculate Short Term Capital Gain on Assets?
Short-term capital gains are profits earned from selling shares or other assets within a year of purchase. These gains are taxed differently from long-term capital gains, often at a higher rate. For shares, short-term capital gains are calculated by subtracting the purchase price, brokerage fees, and other transaction costs from the selling price. The resulting profit is then added to your taxable income. This same method applies to other assets, such as real estate, bonds, mutual funds, and precious metals, with adjustments for specific costs. Understanding how short-term capital gains are calculated and taxed is important for making wise investment decisions and maximizing returns.