Income from capital gains

1. Income from
Capital Gains
Dr. P. Ravichandran
M.Com., M.B.A., M.A (Astrology)., M.Phil., Ph.D.,
D.C.P., D.L.L & A.L., P.G.D.C.A., P.G.D.P.M & I.R.,
S.B.K. College, Aruppukottai – 626101.
 9443424090 & 9080030090
 e-mail id.- prcapk@gmail.com

2. Capital Gain
2
 Profit or gains on the sale of capital asset
shall be considered as capital gain.
 Any Income derived from a capital asset
movable (or) immovable is taxable under
the head Capital Gains under Income Tax
Act, 1961.

3. Basis of Charge
Profit (or) gains arising from the transfer of capital
assets during previous year is chargeable under
the head capital gains if following conditions are
fulfilled;
There should be capital Assets.
There should be transfer of capital assets.
Transfer should take place in previous year.
There should be profit or gains.

4. Capital asset
Any asset like land, buildings, vehicles, plant &
machinery, furniture & fixtures, shares,
debentures, goodwill, tenancy rights,
leasehold rights, licences, patents,
trademarks, etc.,
Capital asset include property of any kind,
whether fixed (or) circulating, movable
(or) immovable, tangible (or) intangible.
The IRS defines the capital asset as “almost
everything you own (or) use for personal
purposes (or) investment”.

5. Capital Assets
Short-term
Capital assets
Long-term
Capital assets
Period of holding is
≤ 36 months
Period of holding is
> 36 months

6. METHOD OF DETERMINING
PERIOD OF HOLDING
• In case when the assessee acquires an asset
as a gift or by a will, the period for which the
previous owner holds the asset is also
included.

7. Capital Assets
Short-term
Capital assets
Long-term
Capital assets
Period of holding is
≤ 36 months
Period of holding is
> 36 months

8. The period of 36 months is taken as 12 months under
following cases (Financial assets):
 Listed shares (Equity or Preference),
 Securities like debentures, government securities,
which are listed in recognized stock exchange,
 Units of UTI,
 Units of Mutual Funds,
 Zero Coupon Bonds.
 w.e.f. AY: 2017-18 for unlisted shares (or) land (or)
building (or) both is held by the assessee the period
of holding has been reduced from 36 months to 24
months.
When period is not 36 months

9. EXCEPTIONS TO CAPITAL ASSETS
a) Any stock-in-trade, consumable stores (or) raw
material held for the purposes of business or
profession.
b) Movable property of the Assessee including
wearing apparel, motor car, electrical
appliances, refrigerator, furniture etc.; held
for his personal use (or) for the use of any
member of his family dependent on him.
► [The exception to this condition is jewellery,
archaeological collections, drawings, paintings,
sculptures (or) any work of art are treated as
capital assets, even though it is meant for
personal use.]

10. c) Agricultural land in rural India.
d) 6% Gold Bonds 1977, 7% Gold Bonds 1980 or
National Defence Gold Bonds 1980, issued by the
central government.
e) Special Bearer Bonds 1991, and
f) Gold Deposit bonds issued under Gold Deposit
Scheme of 1999.
g) Deposit certificates issued under Gold Monetization
Scheme 2015.