This is the first of the series of articles that we are prepared to post related to Capital Gains.
There are five heads of income under the Income Tax Act and one among them is Capital Gains.
So for any income to fall under the head of Capital Gains, the following criteria should be fulfilled.
a) The asset transferred should be a CAPITAL ASSET
b) It should have been TRANSFER during the previous Year
c) There should be PROFITS OR GAINS as a result (Discussed in the next few set of blogs)
CAPITAL ASSET – Section 2(14)
Includes:
a) Immovable Properties
b) Shares, Bonds, Debentures and other securities
Excludes:
a) Stock in Trade
b) Personal Effects [Excludes Gold, Art, Paintings, Ornaments, Sculptures etc]
c) Specified Gold Bonds
d) Agricultural Land
e) Deposit certificate under Gold Monetisation Scheme
TRANSFER – SECTION 2(47)
“Transfer”, in relation to a capital asset, includes:
(i) Sale, exchange or relinquishment of the asset;
(ii) Extinguishment of any rights in relation to a capital asset;
(iii) Compulsory acquisition of an asset;
(iv) Conversion of capital asset into stock-in-trade;
(v) Maturity or redemption of a zero coupon bond;
(vi) Allowing possession of immovable properties to the buyer in part performance of the contract;
(vii) Any transaction which has the effect of transferring an (or enabling the enjoyment of) immovable property; or
(viii) Disposing of or parting with an asset or any interest therein or creating any interest in any asset in any manner whatsoever.