## Calculation of Capital Gains [Section 48]
Section 48 prescribes the mode of computation of capital gains. The structure is the same for both Short Term Capital Gain (STCG) and Long Term Capital Gain (LTCG); the only difference is that LTCG is computed for assets held beyond the prescribed holding period.
### Formula (applies to both STCG and LTCG)
| Particulars | Amount |
|---|---|
| Full Value of Consideration / Sale Consideration (FVOC/SC) | XX |
| (-) Transfer Expenses | (XX) |
| Net Sale Consideration | XX |
| (-) Cost of Acquisition (COA) | (XX) |
| (-) Cost of Improvement (COI) | (XX) |
| Capital Gain / (Loss) | XX / (XX) |
### Assets that are ALWAYS Short Term (regardless of holding period)
Even if held for many years, gains on these assets are taxed as STCG:
- Market Linked Debentures (MLDs) — covered u/s 50AA
- Specified Mutual Fund units (acquired on or after 1.4.2023) — covered u/s 50AA
- Unlisted Bonds / Debentures — covered u/s 50AA
- Depreciable Assets (block of asset concept under section 50)
### Why this matters
The classification of STCG vs LTCG changes:
- The tax rate applicable
- The availability of indexation (where applicable)
- The eligibility for exemptions (Sections 54, 54B, 54D, etc., are mostly LTCG-specific)