PROJECT ON CAPITAL GAINS

I.T. TRAINING , SURAT

 PRESENTED BY:- ANURAG C. SINGH

 REG. NO. :- WRO0356723
 BATCH :- 125
 GUIDED BY :- KAUSHIK CHAUHAN

PREPARED BY:-ANURAG C. SINGH CAPITAL GAINS 1

 2

CAPITAL GAINS

PROGRAM FONTS USED

MS-WORD DROP CAP, BORDER, BIBLIOGRAPHY, HEADER &

FOOTER , COVER PAGE, TABLE, BULLETS, FONTS, FONT
SIZE, FONT-COLOR, HYPERLINKS.

MS-POWER SLIDES, TABLE, BULLETS, FONTS, FONT SIZE, FONT

POINT COLOR, SHAPES, HYPERLINKS, SLIDE TRANSITIONS,
TABLE TOOLS, ANIMATIONS.

MS-EXCEL CELL FORMATTING, CELL COLOR, FONTS, TABLE

BORDER, CELL MERGE.

PREPARED BY:-ANURAG C. SINGH

 INDEX
1 Capital Gains (INTRODUCTION)
2 Basis of Charge
3
Provisions relating to Computation of Capital Gains
4 Types of Capital Gain
5 Capital Asset
6 Types of Capital Asset
7 Transfer
8 Exemptions
9 Computation of STGC
10 Computation of LTCG
11 Practical examples
CAPITAL GAINS PREPARED BY:-ANURAG C. SINGH 3
 Capital Gains
4

INTRODUCTION

Section 45 provides that any profits or gains arising

from the transfer of a capital asset effected in the
previous year will be chargeable to income-tax
under the head “Capital Gains". Such capital gains
will be deemed to be the income of the previous
year in which the transfer took place.

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PREPARED BY:-ANURAG C. SINGH CAPITAL GAINS
 PROVISIONS RELATING TO COMPUTATION OF
CAPITAL GAINS
5

Sections
DEFINITIONS 2(14), 2(47), 2(22B), 2(29A),
2(29B),2(42A), 2(42B), 2(42C)
COMPUTATION OF CAPITAL 48, 49, 50, 50A, 50B, 50C, 51, 55
GAINS,COST OF ACQUISITION &
FULL VALUE CONSIDERATION
EXEMPTIONS FROM CAPITAL GAINS 54 TO 54H
SPECIAL PROVISIONS 47, 47A, 55A, 112
CHARGEABILITY 45, 46, 46A

PREPARED BY:-ANURAG C. SINGH CAPITAL GAINS

 BASIS OF CHARGE
6

The capital gain is chargeable to income tax if the

following conditions are satisfied:-

1. There is a capital asset.

2. Assessee should transfer the capital asset.
3. Transfer of capital assets should take place during
the previous year.
4. There should be gain or loss on account of such
transfer of capital asset.
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PREPARED BY:-ANURAG C. SINGH CAPITAL GAINS

 Capital Asset
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Any income profit or gains arising from the

transfer of a capital asset is chargeable as capital
gains. Capital Asset means property of any kind,
whether fixed or circulating, movable or immovable,
tangible or intangible, held by the assesses, whether
or not connected with his business or profession.

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PREPARED BY:-ANURAG C. SINGH CAPITAL GAINS

 Types of Capital Asset
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Long Term Capital Asset [Sec. 2(29A)]: It is

defined as a capital asset which is not a short-term
capital asset. If capital asset is held by the assessee
for more than thirty-six months it becomes a Long-
term capital asset
Short Term Capital asset [Sec. 2(42A)]: If
capital asset held by an assessee for not more than
thirty-six months immediately preceding the date of
its transfer is known as short term capital asset.
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PREPARED BY:-ANURAG C. SINGH CAPITAL GAINS

 TRANSFER [2(47)]
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As per section 2 (47) Transfer, in relation to a capital asset,

includes sale, exchange or relinquishment of the asset or
extinguishments of any right therein or the compulsory
acquisition thereof under any law.
Transfer includes:
 Sale of asset
 Exchange of asset
 Relinquishment of asset (means surrender of asset)
 Extinguishments of any right on asset (means reducing any
right on asset)
 Compulsory acquisition of asset.
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PREPARED BY:-ANURAG C. SINGH CAPITAL GAINS
 EXEMPTIONS
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Transfer of a residential house and investment in

residential house [Sec. 54A].
Transfer of Agricultural lands [Sec. 54B].
Compulsory Acquisition of Land and Buildings of
Industrial Undertakings [Sec. 54D].
Capital gain on transfer of capital assets not to be
charged in certain cases [Sec. 54E]
Transfer asset and investment in residential
income [Sec. 54F].
Transfer of fixed asset of industrial undertaking
effected to shift it from urban area [Sec. 54G]
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PREPARED BY:-ANURAG C. SINGH CAPITAL GAINS
 Types of Capital Gains
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The profit on transfer of STCA is treated as :-

Short Term Capital Gains (STCG)

while profit on transfer of LTCA is known as :-

Long Term Capital Gains (LTCG).

PREPARED BY:-ANURAG C. SINGH CAPITAL GAINS

 Computation of STCG
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1)Find out the full value of consideration.

2)Deduct the following:
a. Expenditure incurred wholly and exclusively in
connection with such transfer.
b. Cost of acquisition.
c. Cost of improvement

3)From the resulting sum deduct the exemption provided by

section 54B, 54D and 54G.
4)The balancing amount is the short-term capital gain
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PREPARED BY:-ANURAG C. SINGH CAPITAL GAINS

 Computation of LTCG
13

1) Find out the full value of consideration.

2) Deduct the following:
  a) Expenditure incurred wholly and exclusively in
connection with such transfer.
  b) Indexed Cost of acquisition.
  c) Indexed Cost of improvement.
3) From the resulting sum deduct the exemption provided
by section 54, 54B, 54D, 54EC,, 54F and 54G, and
54GA.
4) The balancing amount is the long-term capital gain.
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PREPARED BY:-ANURAG C. SINGH CAPITAL GAINS

 PRACTICAL EXAMPLES
14

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PREPARED BY:-ANURAG C. SINGH CAPITAL GAINS