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What does investment capital gain mean? When there is an increase in the value of the capital asset, such as investment or real estate which gives a higher worth than the purchase price is said to be as investment capital gain. It can also be briefed as when the security price is held by a mutual fund increases above its purchase price that result in a profit as the security sold results gain when realized. If the security continues to be held or the assets are not sold then there is no realization of gain done. Compared to an assets purchase price when there is a decrease in the capital asset value, capital loss is incurred. So, let us discuss more about it and also get some tips to know about the share market.

Types of capital gain
A capital gain may be in general of two types one that of a short term which consists of a year or less and the other one is that of a long term which consists of more than a year. The long term capital gains usually are taxed at a low rate than that of the regular income and this is done to encourage entrepreneurship and investment in the economy. These taxes are commonly known to be as capital gains tax or CGT. A capital gains tax is a tax which is charged on investment capital gain. It varies from country to country.  At present time in India if equities are hold for a year, then it is considered as a long term capital. If these equities are sold through recognized stock exchange then they are non taxable. You should try to go for stock market consultant if you wish to be success.

However, short term (less than one year) capital gain from equities taxable by 15% (rate has been changed from 10% to 15% from 2008-09 budget). There are both advantages and disadvantages of CGT. A cut would increase investment, output, and real wages. If the tax on the return from capital investments is reduced, more of those types of investments will be made. One of the major disadvantages is that it will lead to increase in budget deficit. That would only worse reported capital shortage. The increase or decrease of tax depends on government of that country.

Capital investment in the form of money
A capital investment is the acquisition of a fixed asset that is anticipated to have long life of use before it has to be replaced such as land and building. Anytime a company purchases goods which will benefit the operation of the business, there is a capital investment made. But then it will not be used to cover the operational costs of the business. A capital investment need not only be an asset, it can also be in form of money that is set aside in some sort of interest bearing account. You should know about NSE, BSE, NASDAQ…etc. Without these knowledge you can never be successful in the stock market.

Investments in securities which are generally traded in the stock market are investment securities. An un-certificated security is not represented by an instrument whereas a certificated is. An un-certificated security’s transfer is registered upon books maintained for that purpose by the issuer. A ‘security’ imposes or entails a warrant or right to subscribe to, or purchase any of the foregoing. So, you have got much knowledge about investment capital gain as of now.

 

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