Capital Gains Tax Law

Capital gains tax law states that a tax is to be imposed on sales proceeds of capital assets. Shares, stocks, bonds, mutual fund shares, real estate and inherited property like houses and real estates are some of the items that are considered as capital assets by the Internal Revenue System (IRS).

The laws of capital gains tax are based on the principle that on the sale of any capital asset, if a gain is made then it is taxable. If the capital gains are accrued over a short term, the tax is charged at a normal rate. 15% is the rate of taxation in the USA if the capital gains are over long-term assets. If the taxpayer falls within a tax bracket of 14%, then, he or she is liable to be taxed at a rate of 5% on the long-term capital assets. The capital gains tax laws of the USA stipulates that property held for a period of less than one year is short term and any asset held for above this period is a long term asset. Money lost in the asset investment is exempt from taxation.

Capital gains tax law of India enumerates that no amount of capital gains tax would be charged on the equities that are held for a period of more than a year. If the period is less than a year, a 10% tax is levied on equity shares gains. For the short-term equities, taxes levied are the normal income tax deductions.

Capital gains tax laws of Australia impose capital gains tax on realized capital gains. The tax is not imposed separately, but as a part of the general income tax scheme. The individuals and trusts acquiring assets after the 21st of September 1999 are liable to get a capital gains tax discount of up to 50%. The sale of personal residential property in Australia is also exempt from such taxations.

Capital gains tax laws of Canada do not differentiate between short term and long-term capital gains. Half of the capital gains made are not taxed. Selling of primary personal residence is also not taxable in Canada.