I T CAPITAL GAINS
According to Section 45 (1), any profits or gains earned by assessee during the previous year on the transfer of capital asset are called Capital Gains. The amount will be taxable under the head ‘Capital Gains’. There must be tree essential elements of capital gains are:
A. Capital Assets
B. Transfer of Capital Asset; and
C. There must be profits or gains on such transfer, which will be known as capital gain
(A). CAPITAL ASSETS
Capital assets mean all types of assets either fixed or floating, movable or immovable and tangible or intangible. It also includes goodwill, leasehold rights, rights, jewellery, shares, a manufacturing license, land, building, investments, plant and machinery etc.
We do not include the following assets in Capital Assets:
1. Personal movable assets. It means personal assets e.g. car, any vehicle, television, V.C.R. or electrical appliances held for personal use of the assessee or any member of family. However, jewellery, archaeological collections, drawing (paintings), sculptures or any work of art are treated as capital asset, jewellery includes ornaments made of gold, silver, platinum or any other precious metal and precious stones.
2. Rural agriculture land in India. It must be a rural agriculture land, which is situated in:
I. Areas whose population is less than 10,000 as per published census; or
II. Areas lying atleast a distance of 8 km from local limit of such municipalities.
3. Commercial Goods. Any stock – in –trade, consumable stores or raw material held for the purposes of his business or profession. Profits from these goods are taxable under the head “Profits and Gains of Business or Profession.”
4. Some Special Bonds
I. 6 ½ %Gold Bonds (1977)
II. 7 % Gold Bonds (1980)
III. Special Bearer Bonds (1991)
IV. Gold Deposit Bonds (1999)
Self Generated Assets
Some self–generated assets are treated as capital assets:
I. Self-generated tenancy rights, state carriage permits and loom hours.
II. Rights to
A. Capital Assets
B. Transfer of Capital Asset; and
C. There must be profits or gains on such transfer, which will be known as capital gain
(A). CAPITAL ASSETS
Capital assets mean all types of assets either fixed or floating, movable or immovable and tangible or intangible. It also includes goodwill, leasehold rights, rights, jewellery, shares, a manufacturing license, land, building, investments, plant and machinery etc.
We do not include the following assets in Capital Assets:
1. Personal movable assets. It means personal assets e.g. car, any vehicle, television, V.C.R. or electrical appliances held for personal use of the assessee or any member of family. However, jewellery, archaeological collections, drawing (paintings), sculptures or any work of art are treated as capital asset, jewellery includes ornaments made of gold, silver, platinum or any other precious metal and precious stones.
2. Rural agriculture land in India. It must be a rural agriculture land, which is situated in:
I. Areas whose population is less than 10,000 as per published census; or
II. Areas lying atleast a distance of 8 km from local limit of such municipalities.
3. Commercial Goods. Any stock – in –trade, consumable stores or raw material held for the purposes of his business or profession. Profits from these goods are taxable under the head “Profits and Gains of Business or Profession.”
4. Some Special Bonds
I. 6 ½ %Gold Bonds (1977)
II. 7 % Gold Bonds (1980)
III. Special Bearer Bonds (1991)
IV. Gold Deposit Bonds (1999)
Self Generated Assets
Some self–generated assets are treated as capital assets:
I. Self-generated tenancy rights, state carriage permits and loom hours.
II. Rights to