Equity capital gains are free if you sell shares after a year. You don’t pay long term capital gains taxes for shares sold on a stock exchange.
But if you look at other “assets”, equity is getting a great deal:
- For gold, you have to hold for three years before you get “long term” gains, which are taxed at 20%.
- For real estate the house has to be held for three years, and again 20% gains taxes apply (though taxes can be offset if you buy a new house)
- For debt mutual funds you have now hold for three years before you can apply “indexation” benefits and claim long term capital gains (which are 20% of indexed gains, or 10% of unindexed gains, whichever is lower)
- For unlisted companies, you pay 20% capital gains taxes if you sell shares after a year. (This is still one year, but the taxes are large)
Listed stocks are the only real asset class where, after just one year, you pay no taxes whatsoever.