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Types of Capital Assets for Computing ‘Capital Gain’


For computing capital gains, assets have been divided into two categories

(i)      Short-term capital assets [Section 2 (42-A)].

Short-term capital asset is that which is held by an assessee for not more than 36 months immediately preceding the date of its transfer.

In the case of shares (equity or preference) held in a company the period has been reduced to 12 months with effect from 1-4-88 i.e., assessment year 1988-89.

With effect from assessment year 1995-96, the securities listed in any recognised stock exchange, units of U.T.I. and units of Mutual Funds shall be treated as Long Term capital assets if held for 12 months or more.

In case an assessee subscribes to right issue himself, or subscription is made by renouncee the period shall be counted from the date of allotment of such financial asset.

In case subscription is made against the right being renounced in favour of any other person the period will be counted from the date on which offer is made by the company or financial institution.

Any gain or loss accruing to the assessee on such assets shall be known as short-term capital gain or loss. [2(42B)1.

(ii)     Long-term capital assets. Assets which do not fall within the definition given in section 2(42), i.e., th assets which are held by the assessee for a period exceeding 36 months immediately preceding the date of transfer, are called ‘long-term capital assets’.

Any gain or loss accruing on such asset shall be known as long-term capital gain or loss. [2(42B)].

More Topics ... @ ' Capital Gain's

Capital Gain , Capital Assets & Property for Computing Capital Gain
Types of Capital Assets for Computing ‘Capital Gain’
Types of Capital Gains for Computing ‘Capital Gain’
Computation Of ‘Period Of Holding
 Transfer Of A Capital Asset [Section-2(47)]
Transactions Not regarded as ‘Transfer’ [Section-47]
Capital Gain is Deemed to be the Income of the Previous Year
Amount Received from insurer [Section-45(1A)] for Computing Capital Gain
Transfer of Capital Assets by a person to firm, AOP or Body Of Individuals (BOI) [Section 45(3)] for Computing Capital Gain
 Enhancement of Compensation on Compulsory Acquisition of Assets [Section-45(5)] for Computing Capital Gain
Sale of units Purchased for Deduction U/s 80 CCB [Section-45(6)]
Distribution of Assets by A Company in Liquidation for Computing Capital Gain
Capital Gain on Purchase by A Company of its Own Shares or Other  Securities [Section 46A]
Method of Computing Capital Gain [Section 48]
Expenses Disallowed u/s Section 48 for Computing Capital Gain
Cases in which the Indexation of Cost is not to be done while Calculating long Term Capital Gain
 Computation of Capital Gain in Case of Non-Residents [Sec. 48 Proviso 1 ]
Determination of Cost of Acquisition for Computing Capital Gain.
Taxation of Gain on ‘Slump Sale’ for Computing Capital Gain

Special Provision for full Value of Consideration in certain cases (Section 50C] for Computing Capital Gain
Treatment of Advance Money Received and Forfeited (Section-51] for Computing Capital Gain
Cost of Acquisition of Goodwill [Section-55(2)(a)] for Computing Capital Gain
Cost of Acquisition of Shares [Section 55 (2) (v)] for Computing   Capital Gain
Capital Gains Exempted u/s 10
Capital Gains—Exempted u/s 54
 Capital Gain on Transfer of Self-Cultivated Agricultural Land in Urban   Areas [ Section 54 B]
Capital Gains on Compulsory Acquisition Of Land And Buildings [Section 54D]
 Capital Gain on Transfer of any Long Term Capital Asset [Section-54EC]
Exemption of Capital Gain on Transfer Of Long-Term Capital Assets in case of Investment In Residential House [Section 54F]
Capital Gain on Shifting of Industrial Undertaking from Urban Areas to Non-Urban Areas [Section 54G]
 Exemption of Capital Gain on transfer of assets in case of shifting of Industrial Undertaking from an urban area to any Special Economic Zone (SEZ) [Sec. 54GA]
Long term Capital Gain on Transfer of Residential Property if Net Consideration is Invested in the Equity Shares of an Eligible company [Section 54GB] [w.e.f. A.Y. 2013- 14 but upto A.Y. 201 7-1 8]
Reference to Valuation Officer [Section 55] towards Capital Gain

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