captal gain
satish
(Querist) 16 April 2009
This query is : Resolved
plz tellme about capital gain and his calculation how we calculate capitl gain
Thanks & regards
Satish
Y V Vishweshwar Rao
(Expert) 16 April 2009
The deference of amount between the sale price and purchase price is called the capital gain .
while calculating the index price will be applied and any amount invested on the proerty for development of the proerty is to be deducted
it may be long terms gain or short terms gain .
A V Vishal
(Expert) 16 April 2009
Hope you read the material in detail:
Profits or gains arising from the transfer of a capital asset made in a previous year is taxable as capital gains under the head "Capital Gains". The important ingredients for capital gains are, therefore, existence of a capital asset, transfer of such capital asset and profits or gains that arise from such transfer.
Capital asset
Capital asset means property of any kind except the following :
a) Stock-in-trade, consumable stores or raw-materials held for the purpose of business or profession.
b) Personal effects like wearing apparel, furniture, motor vehicles etc., held for personal use of the tax payer or any member of his family. However, jewellery, even if it is for personal use, is a capital asset.
c) Agricultural land in India other than the following:
Land situated in any area within the jurisdiction of muni-cipality, municipal corporation, notified area committee, town area committee, town committee, or a cantonment board which has a population of not less than 10,000 according to the figures published before the first day of the previous year based on the last preceding census.
Land situated in any area around the above referred bodies upto a distance of 8 kilometers from the local limits of such bodies as notified by the Central Government (Please see Annexure 'A' for the notification).
d) 6 1/2 per cent Gold Bonds, 1977, 7 per cent Gold Bonds, 1980, National Defence Gold Bonds, 1980 and Special Bearer Bonds, 1991 issued by the Central Government.
e) Gold deposit bonds issued under the Gold Deposit Scheme 1999 notified by the Central Government.
Though there is no definition of "property" in the Income-tax Act, it has been judicially held that a property is a bundle of rights which the owner can lawfully exercise to the exclusion of all others and is entitled to use and enjoy as he pleases provided he does not infringe any law of the State. It can be either corporeal or incorporeal. Once something is determined as property it becomes a capital asset unless it figures in the exceptions mentioned above. Something is determined as property it becomes a capital asset unless it figures in the exceptions mentioned above.
Transfer
Transfer includes:
i) Sale, exchange or relinquishement of a capital asset
A sale takes place when title in the property is transferred for a price. The sale need not be voluntary. An involuntary sale like that by a Court of a property of judgement debtor at the instance of a decree holder is also transfer of a capital asset.
An exchange of capital asset takes place when the title in one property is passed in consideration of the title in another property. Relinquishment of a capital asset arises when the owner surrenders his rights in property in favour of another person. For example, the transfer of rights to Subscribe the shares in a company under a 'Right Issue' to a third person.
ii) Extinguishment of any rights in a capital asset
This covers every possible transaction which results in destruction, annihilation extinction, termination, Cessation or cancellation of all or any bundle of rights in a capital asset. For example, termination of a lease or and of a mortgagee interest in a property.
iii) Compulsory acquisition of the capital asset under any law
Acquisition of immovable properties under the Land acquisition Act, acquisition of industrial undertaking under the Industries (Development and Regulation) Act or preemptive purchase of immovable properties by the Income-tax Department are some of the examples of compulsory acquisition of a capital asset.
iv) Conversion of a capital asset into stock-in-trade
Normally, there can be no transfer if the ownership in an asset remains with the same person. However the Income-tax Act provides an exception for the purpose of capital gains. When a person converts any capital asset owned by him into stock-in-trade of a business carried on b
Y V Vishweshwar Rao
(Expert) 17 April 2009
Thank You Mr Vishal You have expalined in detail !
and my refrence is to immoveable proepties sales and capital gains
