Capital Gain 
CAPITAL GAINS
According to income tax act 1961 ‘capital gains’ is the fourth head of income. Any profit or gains arising from the transfer of capital assets during the P.Y. shall be chargeable to income tax under the head capital gains and shall be deemed to be the income of P.Y. in which the transfer took place. Thus from a plain reading – Profits or gains earned on the sale of capital assets by an assessee during the P.Y. is called as capital gains.
Meaning of Capital Asset: Capital asset means property of any kind held by assessee whether these are concerned with the business or profession of assessee or not. These may be tangible or intangible, movable or immovable, fixed or floating assets. It includes jwellary of gold/silver/precious stones, right to purchase shares, share of a partner in the firm, leasing rights in mines, route permits, manufacturing licence or business undertakings as a whole. But capital assets do not include the following:
(i) Stock of business;
(ii) Agriculture land in rural area;
(iii) Personal effects e.g. wearing clothes, personal vehicle, refrigerator, TV, VCR and other electric / electronic appliances of domestic use domestic furniture, etc.;
(iv) 6½ % gold bonds 1977; 7% gold bonds 1980; National Defence Gold Bonds 1980; Special Bearer Bonds 1991; Gold Deposits Bonds 1999 issued by the Central government. If precious stones, gold and silver is being fixed / set in the furniture, utensils or clothes of assessee then these items become capital assets.
Types of Capital Assets
I. Short Term Capital Assets: The capital assets held by an assessee for a period of not more than 36 months preceeding the date of transfer are called as S.T. capital assets. In case of shares of a company, listed securities, units of U.T.I., zero coupon bonds, units of mutual funds and equity oriented units. The possession period of assets should not be more than 12 months. It includes the capital assets on which depreciation is allowed under
According to income tax act 1961 ‘capital gains’ is the fourth head of income. Any profit or gains arising from the transfer of capital assets during the P.Y. shall be chargeable to income tax under the head capital gains and shall be deemed to be the income of P.Y. in which the transfer took place. Thus from a plain reading – Profits or gains earned on the sale of capital assets by an assessee during the P.Y. is called as capital gains.
Meaning of Capital Asset: Capital asset means property of any kind held by assessee whether these are concerned with the business or profession of assessee or not. These may be tangible or intangible, movable or immovable, fixed or floating assets. It includes jwellary of gold/silver/precious stones, right to purchase shares, share of a partner in the firm, leasing rights in mines, route permits, manufacturing licence or business undertakings as a whole. But capital assets do not include the following:
(i) Stock of business;
(ii) Agriculture land in rural area;
(iii) Personal effects e.g. wearing clothes, personal vehicle, refrigerator, TV, VCR and other electric / electronic appliances of domestic use domestic furniture, etc.;
(iv) 6½ % gold bonds 1977; 7% gold bonds 1980; National Defence Gold Bonds 1980; Special Bearer Bonds 1991; Gold Deposits Bonds 1999 issued by the Central government. If precious stones, gold and silver is being fixed / set in the furniture, utensils or clothes of assessee then these items become capital assets.
Types of Capital Assets
I. Short Term Capital Assets: The capital assets held by an assessee for a period of not more than 36 months preceeding the date of transfer are called as S.T. capital assets. In case of shares of a company, listed securities, units of U.T.I., zero coupon bonds, units of mutual funds and equity oriented units. The possession period of assets should not be more than 12 months. It includes the capital assets on which depreciation is allowed under