Capital gain
Also called: capital loss
The profit from selling an investment for more than you paid for it; a capital loss is the opposite.
A capital gain is the difference between the selling price and the buying price, when the selling price is higher. If you sell for less than you paid, the difference is a capital loss.
A gain or loss is "unrealised" while you still hold the investment and "realised" once you sell. Tax rules for capital gains depend on how long you held the asset and on current law, which changes from time to time.
Example
You buy 100 shares at ₹250 and sell them at ₹310. Your capital gain is 100 × ₹60 = ₹6,000, before costs and taxes.
Learn more in these lessons
- Dividends, capital gains and lossesHow do you make or lose money from shares?
- Trading costs and taxes on sharesWhat charges and taxes do you pay when you buy and sell shares?
- Portfolio rebalancingWhat is rebalancing, and how often should you do it?
- Tax on shares, funds and other investmentsHow are different investments taxed, and what changes the tax you pay?
Related terms
Spotted a mistake or something unclear? Report it by email. Here is how corrections work.