Capital gain--revision

vipul jain (EFFORTS NEVER FAIL) (2894 Points)

20 September 2011

FAST TRACK ---- CAPITAL GAIN

REVISION TIME

CHARGE :- SEC. 45

Capital Asset Sec. 2(14)

Transfer Sec. 2(47)

YOC=YOT

Meaning :-

Any Property

Exceptions :-

SIT
Personal Assets - Excluding jewellry, archeological collections, any work or art, drawings, paintings, sculptures.
Rural agricultural land in India.
Gold bonds.
special bearer bonds.

Meaning :-

Exchange
Sale
Relinquishment
Extinguishment
Conversion to SIT
Compulsory acquisition

Exceptios :- No Transfer

Sec. 47

Gifts, inheritance, conversion, etc.

Exceptions :-

Taxable on Receipt basis

Insurance compensation
Conversion to SIT
Compulsory acquisition of the property.. etc.

TYPE OF CAPITAL ASSET

STCA [SEC. 2(42A)]

LTCA [SEC. 2(29A)]

Holding period up to 36 months

Exceptions :- Holding period up to 12 months

equity or pref. shares in a company
other listed sec.
ZCB
UTI units
units of mutual fund

Holding period of more than 36 month or 12 month.

Note:- An asset held exactly for 36 months or 12 months, as the case may be, will also be STCA.

Note :- In computing the period of holding the day on which the asset is transferred is to be excluded.

COMPUTATION OF CG [ SEC.48]

STCG

LTCG

Full value of consideration

Less: Expenses incurred wholly and exclusively for such transfered

Net Consideration

Less: COA

Less: COI

STCG

Less: Exemption u/s 54B, 54D, 54G, 54GA

Taxable STCG.

Full value of consideration

Less: Expenses incurred wholly and exclusively for such transfered

Net Consideration

Less: Indexed COA

Less: IndexedCOI

LTCG

Less: Exemption u/s 54, 54B, 54D, 54EC, 54F, 54G, 54GA

Taxable LTCG.

Note :- Any sum paid in account of STT is not deductible in computing CG.

SPECIAL CASES OF COMPUTATION

SEC. 45	TRANSACTION	FULL VALUE OF CONSIDERATION	YOC
(1)	Transfer of Capital asset	Agreed consideration (subject to sec. 50C and 55A)	P.Y in which transfer took place.
(1A)	Damage to. or destruction of, any capital asset. etc.	Insurance compensation i.e. Money + FMV (on date of receipt) of other assets received.	P.Y. in which money or other assets is received from the insurance company
(2)	Conversion of a capital asset into SIT	FMV as on the date of conversion	P.Y. in which SIT is sold.
(2A)	Transfer of shares held in depository (FIFO basis)	Agreed consideration	P.Y. in which transfer took place
(3)	Transfer of capital asset as capital contribution or otherwise by a partner or member to FIRM / AOP / BOI.	Amount at which such asset is recorded in books of the FIRM / AOP / BOI .	P.Y. in which transfer took place
(4)	Distribution of capital asset on dissolution or otherwise of FIRM / AOP / BOI.	FMV as on the date of transfer.	P.Y. in which transfer took place
(5)	Compulsory acquisition under any law; or any transfer whose consideration is determined or approved by Cent. Govt. or RBI.	Compensation awarded; or amount of compensation as determined or approved by Cent. Govt. / RBI.	The year in which such compensation or part thereof is first received.

COST OF ACQUISITION

Purchase price + brokerage on acquisition
Befor 1-4-1981 :- Option of COST or FMV as on 1-4-1981
Original Shares :- Price + Brokerage
Bonus share :- NIL
Right shares for existing shareholders :- Price paid to Copmany
Right shares acquired by others :- price paid to company + price paid to renouncer
Self generated assets :- NIL (FMV option not available)