Long-Term Capital Gain refers to the profits earned from the sale of an asset, property or investment that has been held for a time duration that gets classified as long-term. The definition of long-term depends on the class of assets.

The following deductions need to be made from the sale value of the asset:-

1. Expenses connected with the sale or transfer, ̥
2. Asset’s indexed cost of acquisition and ̥
3. Indexed cost of improvement, if incurred. ̥
The tax rates for Long-Term and Short-Term capital gains are different.