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ABHINAY KATAKAR (32) SONAL KIRVE (34) KEVIN MARTIS (36) RASHMI MORE (38) HARISH RAJENDRAN (40)
CAPITAL GAIN
DEFINITION
section 45 is the main charging for levy of capital gain tax, wherein sec.45(1) deals with general chargeability of capital gain to income tax and the balance deals with specific situation. However, from the plain reading of section 45, capital gain may be defined as profits and gains arising from transfer of capital asset. Thus, the 2 basic constituents of capital gains are : 1) A capital Asset u/s 2(14) 2) its transfer u/s 2(47)
a) Capital assets other than shares in the company b) Capital assets being shares in a company listed securities or units in UTI or zero coupon bond etc. long term capital asset [u/s 2(29A)]
Capital asset u/s 2(47) Transfer u/s 2(47) Financial asset u/s 2(42A) Not a financial asset u/s 2(42A)
Hp > 12 months
Hp<12 months
Hp <36 months
Hp >36 months
STCA/STCG LTCA/LTCG
: Cost of Acquisition
: Cost of Improvement SHORT TERM CAPITAL GAIN
XX
XX XX XX
XX
: Indexed Cost of Acquisition : Indexed Cost of Improvement LONG TERM CAPITAL GAIN
XX XX XX XX
Cost of Acquisition Cost Inflation Index for the year of Acquisition by Assesses OR for 1881-82 whichever is later
Cost of Improvement Cost Inflation Index for the year in which improvement took place
Exceptions to the rule that the rental income is taxable under HP.
Income from sub letting Income from OTHER SOURCES since the assessee is not the owner. Composite rent When a building has been let out along with the furniture , then such letting out is called composite letting. As per sec 56(2) , when the rent is inseparable income from other sources.
Sec 23(1)(c) If the property is actually let out and was vacant during the year and rent received or receivable is lesser due to vacancy then such lower rent shall be the annual value.
Sec 23(2) If a HP is self occupied . OR If a HP couldn't be occupied for reasons of employment / profession elsewhere. In such cases the AV= NIL.
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Xxx xxxx
4)Interest on Securities. (-)exempt u/s 10(15) (-) Realization charges and Interest can loan. For eg:-Interest can post of saving A/c is tax free. 5)Income from Building, Machinery, Furniture on hire. (-) Repairs/Insurance/Depericiation can be deducted. 6)Family pension (-) standard deduction (1/3 of fp or Rs.15000 whichever is less) 7)Gifts >50,000 from non relative.
8)Other taxable items (-)allowance to MP and MLA (-)Govt. awards and reward (-)the general exp incurred for income except. 9)Recovery against earlier deduction