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Explain Capital Gain Tax and its types under income tax act, 1996? |
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Answer» Capital Gains: Any profits or gains arising from the transfer of a capital asset effected in the previous year should, save as otherwise provided in sections (54, 54B, 54D, 54E, 54EA, 54EB, 54F, 54G and 54H), be chargeable to income-tax under the head ‘Capital gains’, and should be deemed to be the income of the previous year in which the transfer took place. Types of Capital Gains: 1. Long term Capital Gain: means capital gain arising from the transfer of a long term capital asset more than 12 months in case of equity investments 2. Short term Capital Gain: means capital gain arising from the transfer of a short term capital asset less than one year in case equity . Where the total income of an assesses includes any income, arising from the transfer of a long term capital asset, which is chargeable under the head ‘Capital gains’, the tax payable by the assesses on the total income. |
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