Capital gain tax paid on the sale of fixed assets should be classified as:

Cash outflow from Investing Activities

Taxes come in various forms, such as income tax (levied on regular profits), capital gains tax (imposed on profits from selling assets), and dividend tax (tax applied to distributed dividends to shareholders). According to AS-3, the accounting standard, cash flows associated with income taxes must be clearly disclosed and categorized as cash flows from operating activities unless they can be specifically linked to financing or investing activities.
* Taxes on operating profits should be labeled as operating cash flows.
* Dividend tax, which is the tax paid on dividends, should be categorized as a financing activity, along with the dividend payments themselves.
* Capital gains tax paid when selling fixed assets should be placed under the heading of investing activities.