Capital Gain - Income Tax

Description

CAPITAL GAINS Sec 45(1)

Contents :

1. Any profit or gain arising from the transfer of a capital asset

2. Effected in a previous year

3. Shall be chargeable to Income Tax under the head capital Gain

4. In the previous year in which transfer took place

5. After providing exemption under section 54 to 54GB.

Introduction of Capital gain

Main Elements of Capital Gains :

1. Capital Assets

2. Transfer of Capital Assets

3. Computation of Capital Gains

Capital Asset Section 2(14)

Exception of personal movable asset :

(a) Jewellery

(b) Bullion

(c) Archaeological collection

(d) Drawing

(e) Painting

(f) Sculptures

(g) Any work of art

Kinds of capital assets 

1) Short-term Capital Assets

2) Long- term Capital Assets

Short-term Capital Assets and Short-term Capital Gain

Long-term Capital Assets and Long-term Capital Gain

Computation of Short Term Capital Gain

Computation of Long Term Capital Gain

Indexation Table : Financial Year, Cost of Inflation Index

Computation of Capital Gains in Special Cases

Conversion of Capital Asset into Stock in Trade Section 45(2)

Transfer of Capital Asset by Partner/Member to Firm/AOP/BOI. Section 45(3)Transfer of Capital Asset by Firm/AOP/BOI to Partner/ Member by way of distribution on dissolution. Section 45(4)

Depreciable Asset

Section 54

Section 54B

Section 54D

Section 54EC

Section 54EE

Section 54F

Section 54G

Section 54GA

Section 54GB

Transfer (Section 2(47) : Transfer, in relation to capital assets, include :

1. The sale, exchange (barter), renouncement or gift of the asset; or

2. The Expiry of any rights therein; or

3. The compulsory acquisition thereof under any law (by government) ;

4. Conversion of capital asset into stock in trade (deemed transfer).

5. Long term lease (more than 12 year)

6. The maturity or redemption of a zero-coupon bond.

Capital Gain u/s 45 - 55

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