Section 45(1) CHARGING SECTION FOR CAPITAL GAINS
Section 45(1)
CHARGING SECTION FOR CAPITAL GAINS
LANGUAGE OF SECTION 45(1)': Any profit's or gains arising
from the transfer of a capital asset-effected in the previous -:year, shall be chargeable to income tax
under the head
capital gains and shall be
deemed to be the
income of the previous year in which the transfer
took place unless
such capital gain is exempt
u/s 54, 54B, 54D, 54EC, 54EE, 54F,
546, 546A or 54GB.
The following are the essential conditions for taxing
capital gains:
•
There must be a capital asset;
•
The capital asset must
have been transferred;
•
There must be profits
or gains on such transfer, which will be known as capital gains;
and
•
Such capital gain should
not be exempt u/s 54, 54B, 54b,
54EC, 54EE, 54F,
54G, 54GA or 54GB.
If all
the above conditions are satisfied, the capital
gains shall arise
and taxed in the previous year in which the asset is transferred.
SHORT-TERM CAPITAL GAMS v/s LONG-TERM CAPITAL GAINS
•
Short-Term Capital Gains
(Section 2(42B)}: Gains/losses arising on the transfer of a short-term capital asset are referred to as short-term Capital gains/losses.
•
Long-Term Capital Gains
(Section 2(29b)}: Gains/losses arising
on the transfer of a long-term capital asset are referred to as long-term capital gains/losses.
• The period of holding of a capital asset determines whether such capital asset would qualify as a short-term capital asset or a long-term capital asset.
• Generally, a capital asset is said to be a short-term capital asset if its period of holding does not exceed 36 months (ie 3 years); if the capital asset is held for a period exceeding 36 months, it is said to be a long-term capital asset. However, there are certain exceptions to this general rule. The exceptions have been captured in the table given below (POH = Period of Holding):
|
Type of Capital Asset |
Short-Term. |
Long-Term |
|
Listed Shares
(Equity/Preference) |
POH < 12 Months |
POH > 12 Months |
|
Unlisted Shares
(Equity/Preference) |
POH < 24 Months |
POH > 24 Months |
|
Months Listed Securities
(Debentures, Bonds, etc) |
POH < 12 Months |
POH > 12 Months |
|
Units of Unit Trust of India
('UTI') (Listed/Unlisted) |
POH < 12 Months |
POH > 12 Months |
|
Units of Equity
Oriented Mutual Fund (Listed/Unlisted) (in
an equity oriented mutual
fund, at least
65% of the
total funds are invested in equity shares) |
POH < 12 Months |
POH > 12 Months |
|
Zero Coupon Bond
(Listed/Unlisted) |
POH < 12 Months |
POH > 12 Months |
|
Immovable Property
(Land/Building/Both) |
POH < 24 Months |
POH > 24 Months |
|
Any Other Capital Asset |
POH < 36 Months |
POH > 36 Months |
Demo Classes of Tax by Prof. Vinit Sir: https://www.conceptonlineclasses.com/demovideos
Visit Website: https://www.conceptonlineclasses.com/
#Section45CHARGINGSECTIONFORCAPITALGAINS
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