What is Capital Gain?

Capital Gain is earned after the sale of an asset like stocks, bonds, real estate when the selling price is higher than the cost price. It is a profit earned at the end of the transaction. The capital loss, on the other hand, is reverse of capital gain.   It is of two broad types:

  • Unrealised: It stands for the gain on investment which has not yet been completely sold but has to potential to give profit on its sale.
  • Realised: It refers to the capital gain which has already been earned on the sale of the asset.

In financial terms, capital gain mostly stands for the realised capital gain. Thus, in simple terms, it is the difference between selling price and cost price of an asset.

 

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