Capital Gains - Mutual Funds
A common purpose of saving and investing your money in Mutual Funds or other financial products is to grow your money or build wealth. So we look out for gain from our investments.
Today we are going to explore the word “Capital Gains”
Here is a simple & a short read.
What is a Capital Gain ?
When the current value of your investments are more than the invested value, you have made Capital Gains. The increase in the value of your investments /assets are termed as Capital Gains. Capital Gains are not realised uIntil the investments/assets are sold.
On the other hand if the current value of the assets are less than the invested value, you have incurred Capital Loss
Capital Gains can be further classified into Short Term Capital Gains (STCG) and Long Term Capital Gains (LTCG).
From a Mutual Fund perspective,
For Equity/Hybrid Schemes – STCG would cover capital gains realised from investments that are less than a year. If you hold investment for more than a year, then any gains made from it would be LTCG.
For Debt Oriented schemes – Any gain from investment held for less than 3 years is STCG and gain realised from investment held for more than 3 years is LTCG
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