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Seminar on direct & indirect taxes - capital gain
- 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
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