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INCOME FROM CAPITAL GAIN, INCOME FROM HOUSEHOLD PROPERTY, INCOME FROM OTHER SOURCES.

GROUP MEMBERS
• • • • • ABHINAY KATAKAR (32) SONAL KIRVE (34) KEVIN MARTIS (36) RASHMI MORE (38) HARISH RAJENDRAN (40)

CAPITAL GAIN DEFINITION section 45 is the main charging for levy of capital gain tax. wherein sec. from the plain reading of section 45. Thus. However. capital gain may be defined as profits and gains arising from transfer of capital asset. the 2 basic constituents of capital gains are : 1) A capital Asset u/s 2(14) 2) its transfer u/s 2(47) .45(1) deals with general chargeability of capital gain to income tax and the balance deals with specific situation.

• long term capital asset [u/s 2(29A)] .term capital assets [u/s 2(42A)] a) Capital assets other than shares in the company b) Capital assets being shares in a company listed securities or units in UTI or zero coupon bond etc.Kinds of capital assets • Short.

Kinds of capital gains • Long-Term capital gains [ sec.2(42B)] .2(29B)] • Short-term capital gains [sec.

Chargeability of capital gain asset Not a capital assets u/s 2(14) No capital gains Capital asset u/s 2(47) Transfer u/s 2(47) Financial asset u/s 2(42A) Not a financial asset u/s 2(42A) Not a transfer u/s 2(47) Hp > 12 months Hp<12 months Hp <36 months Hp >36 months STCA/STCG LTCA/LTCG .

The balance is the taxable short term Capital gain or loss Particulars Full Value Of Consideration XX Rs Rs XX Less : Expenditure incurred in connection with transfer : Cost of Acquisition : Cost of Improvement SHORT TERM CAPITAL GAIN XX XX XX XX .

The balance is the taxable Long term Capital gain or loss Particulars Rs Rs Full Value Of Consideration XX Less : Expenditure incurred in connection with transfer XX : Indexed Cost of Acquisition : Indexed Cost of Improvement LONG TERM CAPITAL GAIN XX XX XX XX .

INDEXED COST OF ACQUISITION Cost of Acquisition Cost Inflation Index for the year of Acquisition by Assesses OR for 1881-82 whichever is later Cost Inflation Index for the year of transfer of the Asset .

INDEXED COST OF IMPROVEMENT Cost of Improvement Cost Inflation Index for the year in which improvement took place Cost Inflation Index for the year of transfer of Asset .

Income from house property • House property for this purpose means: • Any building which has the characteristic features of a building • Eg. cinema theatres etc . residential building.

AND  Such building should not be used for own business or profession. .  There should be a building or a land appurtenant there to .Conditions for taxing income under the head house property. AND  The property should be owned by the assessee.

: CASE 1: Mr. who intends to carry on his private business. . X uses his property to carry on his own private business. – No income from HP. X lets out a HP to Mr. – Income from HP.g.  E. Y.Section 22 (charging section)  “ The Annual Value of building or land appurtenant thereto is chargeable to tax in the hands of the owner provided the same is not used for own business or profession”.  CASE 2: Mr.

 Income from sub letting – Income from OTHER SOURCES since the assessee is not the owner. .  Composite rent – When a building has been let out along with the furniture . when the rent is inseparable – income from other sources. then such letting out is called composite letting.Exceptions to the rule – that the rental income is taxable under HP. As per sec 56(2) .

Income from house property Let out property Vacant let out property Self occupied property Deemed let out property .

.Section 23( Annual Value)  Sec 23(1)(a) – AV = Rent at which the HP is reasonably expected to be let out.

. then such rent received or receivable is taken as the ANNUAL VALUE.Sec 23( Annual Value)  Sec 23(1)(b) – If the house property is actually let out and if rent received or receivable is higher than the reasonable rent as per sec 23(1)(a).

. Sec 23(1)(c) – If the property is actually let out and was vacant during the year and rent received or receivable is lesser due to vacancy then such lower rent shall be the annual value.

In such cases the AV= NIL. . Sec 23(2) – If a HP is self occupied . OR If a HP couldn't be occupied for reasons of employment / profession elsewhere.

Gross Annual value 2. Standard deduction(30% of NAV) xx 6. Interest on borrowed funds xx 7. xx 3.Following steps should be taken in case of hp let out Particulars 1. Less : Municipal Taxes actually paid and borne by assessee(owner) during the previous year. Net annual value xx 4. Net taxable income Rs xx Xxx xxxx . Deduction u/s 24 5.

. 2)Winning from lottery etc. 3)Employees Contribution to PF etc (-) Paid/credited within the due date.Income from other sources Format of total income from other sources:1)Dividend (Foreign company/Co-operative Society) (-) Realization charges/interest on loan.

000 from non relative. Machinery. For eg:-Interest can post of saving A/c is tax free. 5)Income from Building. Furniture on hire. (-)exempt u/s 10(15) (-) Realization charges and Interest can loan.15000 whichever is less) 7)Gifts >50. 6)Family pension (-) standard deduction (1/3 of fp or Rs.4)Interest on Securities. . (-) Repairs/Insurance/Depericiation can be deducted.

awards and reward (-)the general exp incurred for income except. 9)Recovery against earlier deduction .8)Other taxable items (-)allowance to MP and MLA (-)Govt.