Capital gain is the profit one earns on the sale of an asset like stocks, bonds, or real estate.
The gain occurs when the current or sale price of an asset or investment exceeds its purchase price
In capital gain when the selling price of an asset exceeds its purchase price.
Two Types of Capital Gain:
Realized Capital Gain
Unrealized Capital Gain
Realized Capital Gain: The gain from the final sale of an asset
Unrealized Capital Gain: The gain arises from the current price of an asset exceeds its purchase price.
Suppose a person purchased 100 shares of Rs 100 each at a total cost of Rs 10,000. After one year if he sells those shares for Rs 130 each with the total selling price of those 100 shares being Rs 13,000, it would result in a profit of Rs 3,000. This amount is called a capital gain.