Income from Capital Gains

Any profit or gain arising from transfer of capital asset held as investments are chargeable to tax under the head capital gains. The gain can be on account of short- and long-term gains. A capital gain arises only when a capital asset is transferred. Which means if the asset transferred is not a capital asset; it will not be covered under the head capital gains. Profits or gains arising in the previous year in which the transfer took place shall be considered as income of the previous year and chargeable to income tax under the head Capital Gains and the concept of indexation shall apply, if applicable. Capital Asset: It is any property held by the income tax assessee excluding Any item held for a person's business or profession (stock, ready goods, raw material) will be taxed under the head profits and gains of business or profession Agricultural land means any land from which agricultural income is derived. Land which is not urban and is outside of 8 kilometres of a municipality, where population is less than 10,000 qualifies to be agricultural land Capital assets are of two types: Short- and long-term capital asset. Short-term capital asse

This article was originally published on January 08, 2021.