2. Capital Gains Tax

Tax on gain in capital is referred to as capital gain tax. This tax is levied if you sell your property, bonds, shares, jewelry, or anything that gives you profit. The profit you gained in this can be calculated by deducting the total amount you get by selling your asset and the amount you paid for it. You have to pay tax on the profit.

For long term and short term capital gains , tax rates are different. The long term capital gain is charged if the capital assets are kept for more than a certain period, 1 year in case of share and 3 years in case of property. Short term capital gains tax is applicable if these assets are held for less than certain period.

3. Wealth tax

It is a kind of direct tax based on the market value of assets that are owned. These assets include, but are not limited to, cash, bank deposits, shares, fixed assets, private cars, assessed value of real property, pension plans, money funds, owner occupied housing and trusts.

Wealth tax is applicable on individuals, HUFs or companies on the value of their assets in a given financial year on the date of valuation. It does not include productive assets like commercial property, stocks, bonds, fixed deposits and mutual funds.