Income Tax and CAPITAL GAINS..
Profits and gains arising from transfer of a capital asset (Property, Stocks, Mutual Funds, Gold, Silver etc) are chargeable to income tax under the head, Capital Gains (Sections 45 to 55A)*.
Profits and gains arising from transfer of a capital asset (Property, Stocks, Mutual Funds, Gold, Silver etc) are chargeable to income tax under the head, Capital Gains (Sections 45 to 55A)*.
Capital
gains can be divided in 2 categories i.e. short term and long term depending
upon period of holding the asset.
Short
term capital gain is taxable like an ordinary income in the case of all
assesses.
However,
long term capital gain gets a special treatment. It is computed by, deducting
indexed cost of acquisition and indexed cost of improvement' from net
consideration since A.Y. 1993-94.
It
is taxable at a special rate of 20%. An assessee can avail exemption under
section 54, 54 B, 54D, 54EC, 54ED, 54F, 54G, 54GA and 54H on fulfilment of
certain conditions.
*Note: special treatment of capital gains arising
from transfer of securities is given under the promoting capital market
heading.
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