Definition
Capital gains exemption means you do not have to pay tax on the profit earned from selling an asset, under certain conditions. The government provides this benefit to encourage investment in specific assets or schemes.
Example
For example, if you sell a property and earn a profit, you may get a capital gains exemption if you reinvest that money into another property within the allowed time. In this case, you may not have to pay tax on that profit.
Caution
Capital gains exemption is allowed only under specific rules and time limits. If the conditions are not met, the tax benefit may not apply, so investors should understand the rules carefully.