Where are the captions stored for images that are sent or recieved in WhatsApp? When sending images in WhatsApp, there is an option to add caption to it. This caption is visible on image, at the receiving end, but when this image is copied or forwarded, only image is sent? (although the selection shows image caption also selected)

Is the image caption not in the image file itself Or its stored separately somewhere locally and so that part is dropped?

How can I forward the image along with its caption?
This is a bug in Whatsapp. It should send both image and caption. 

It's present both in Android and iPhone versions. Doesn't matter if you user the FORWARD ("Arrow/Forward") or the SHARE feature, both loose the original caption.

You and everyone with this problem can (and should) send a bug report thru the app by accessing the Settings panel > help > Contact us.