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Glossary term

Capital Gains

Also called: capital gain, capital gains tax, share sale gain, short-term capital gain, long-term capital gain.

A capital gain is the gain from selling an asset for more than its eligible cost. For listed shares, a calculation starts with sale value minus purchase cost. Eligible expenses can change the taxable amount. The holding dates decide which tax class the gain enters.

How it is read

A gain is worked out for each sale. Short-term and long-term share gains are kept separate because the tax rules differ. The long-term threshold applies to annual eligible gains, not separately to every trade. A calculator can show an estimate for its stated share-sale scope.

What it does not tell you

The gain before tax is not the money kept after tax and charges. A listed share sale must meet the applicable legal conditions for these rates. Other assets and unusual cases can follow different rules. A calculator estimate is not a tax filing or an assessment.

Securities Transaction Tax (STT)

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CAGR (Compound Annual Growth Rate)

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Reference. ss.111A/112A (1961 Act), now ss.196/198 (2025 Act), as published by the Income Tax Department.
The lesson that uses this term

How do capital gains on shares work?

Capital gain starts with the sale value minus the purchase cost. Some allowed costs can change how much of that gain is taxed. Holding dates decide whether these listed share sales have short-term or long-term gains. Current tax rules use different rates and set a yearly tax-free limit for long-term gains.

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