content------ CHARGING SECTION 45 CAPITAL ASSETS U/S 2(14) TRANSFER U/S 2(47) LONG TERM CAPITAL ASSETS INDEXATION ON LTCA SHORT TERM CAPITAL ASSETS COST OF ACQUISITION CHARGING SECTION 45 CAPITAL ASSETS U/S 2(14) TRANSFER U/S 2(47) LONG TERM CAPITAL ASSETS INDEXATION ON LTCA SHORT TERM CAPITAL ASSETS COST OF ACQUISITION

1. SEMINAR ON DIRECT
& INDIRECT TAXES
TOPIC :- COMPUTATION OF CAPITAL GAIN –
TRANSFER AND COST OF ACQUISITION.
SUBMITTED TO: SUBMITTED BY:
DR. PRAMOD HARSH JAIN
SAXENA 1702000

2. CONTENTS :-
 CHARGING SECTION 45
 CAPITAL ASSETS U/S 2(14)
 TRANSFER U/S 2(47)
 LONG TERM CAPITAL
ASSETS
 INDEXATION ON LTCA
 SHORT TERM CAPITAL
ASSETS

3. CHARGING SECTION
45
ANY PROFIT OR GAINS
ARISING FROM TRANFER OF
A CAPITAL ASSETS IS
CHARGEABLE TO TAX UNDER
THE HEAD CAPITAL GAIN IN
THE YEAR IN WHICH
TRANFER TOOK PLACE.

4. CAPITAL ASSETS
CAPITAL ASSETS MEANS ANY PROPERTY
HELD BY ASSESSEE BUT DOES NOT
INCLUDE FOLLOWING:-
• ANY STOCK IN TRADE OF BUSINESS OR
PROFESSIONAL CARRIED ON BY
ASSESSEE
• PERSONAL EFFECTS i.e. MOVABLE
PROPERTY INCLUDING
CLOTH,FURNITURE FOR PERSONAL USE
BUT EXCLUDING ---
(1) JEWELLERY (2) ARCHAECILOGICAL
COLLECTION
(3) DRAWING (4) PAINTING (5)
SCULPTURES

5. CONT......
• AGRICULTURAL LAND SITUATED
IN “RURAL AREA”
• 6.5% GOLD BONDS, 7% GOLD
BOND, NATIONAL GOLD BONDS,
SPECIAL BEARER BONDS 1991.
• GOLD DEPOSIT BOND ISSUED
UNDER GOLD DEPOSIT SCHEME
1999.

6. TRANSFER U/S
2(47)
TRANSFER FOR THE PURPOSE OF
CAPITAL GAIN INCLUDES FOLLOWING :-
SALE, EXCHANGE, RELINQUISHMENT
OF THE ASSET.
EXTINGUISHMENT OF ANY RIGHT ON
ANY ASSET.
COMPULSORY ACQUISITION UNDER
ANY LAW.
 CONVERSION OF CAPITAL ASSET INTO
STOCK IN TRADE OF BUSINESS OF
THE ASSESSEE.

7. CONT…..
 TRANSACTION INVOLVING POSSESSION
OF IMMOVABLE PROPERTY IN PART
PERFORMANCE OF A CONTRACT REFER
TO IN U/S 53A OF TRANSFER OF
PROPERTY ACT.
 ANY TRANSACTION BY WAY OF
BECOMING A MEMBER ACQUIRING SHARE
IN A COMPANY, CO-OPERATIVE SOCIETY
ETC. WHICH HAS THE EFFECT OF
ENJOYMENT OF ANY IMMOVABLE
PROPERTY
 REDEMPTION/MATURITY OF ZERO
COUPON BONDS.

8. LONG TERM CAPITAL
ASSETS
LTCA MEANS A CAPITAL ASSET HELD BY
ASSESSEE FOR MORE THAN 36 MONTH
IMMEDIATELY BEFORE ITS TRANSFER. BUT IN
FOLLOWING CASES ASSET HELD FOR MORE
THAN 12 MONTH WILL BE TREATED AS LTCA :-
 EQUITY & PREFERENCE SHARES (LISTED)
 DEBENTURES (LISTED)
 UNITS OF UTI OR EQUITY MUTUAL FUND
(LISTED)
 ZERO COUPON BONDS (BY FINANCE ACT
2005) (LISTED).

9. CALCULATION OF LTCG :-
SALE CONSIDERATION = XXX
LESS:- INDEX COST OF ACQUISITION = XXX
LESS:- INDEX COST OF IMPROVEMENT = XXX
LESS:- COST OF TRANSFER = XXX
LTCG XXX
WHERE,
ICOA= COA * CII Of Year of Sale)/(CII of Year of
Purchase).
ICOI = COI * CII Of Year of Sale)/(CII of Year of
IMPROVEMENT).
INDEX OF YEAR 16-17 = 1125

10. SHORT TERM CAPITAL
ASSETS
STCA MEANS ANY CAPITAL ASSET HELD BY AN
ASSESSEE FOR LESS THAN 36 MONTH OR
LESS. SOME ASSETS ARE CONSIDERED
SHORT TERM IF HELD FOR LESS THAN 12
MONTHS.
CALCULATION OF STCG :-
SALE CONSIDERATION = XXX
LESS:- COST OF ACQUISITION = XXX
LESS:- COST OF IMPROVEMENT = XXX
LESS:- COST OF TRANSFER = XXX
STCG XXX

11. COST OF ACQUISITION

12. THANK YOU