Capital gains shall be chargeable to tax if following conditions are satisfied: a) There should be a capital asset. In other words, the asset transferred should be a capital asset on the date of transfer; b) It should be transferred by the taxpayer during the previous year;

What is included in the cost of capital gain?

It includes the purchase consideration plus any expenditure incurred exclusively for acquiring the capital asset. However, in respect of capital asset acquired before 1st April, 2001, the cost of acquisition will be higher of the actual cost of acquisition of the asset or fair market value of the asset as on 1st April, 2001.

How is the advance amount for capital gains determined?

At the time of determining the capital gains, the advance amount can be reduced from the acquisition cost of the asset in the year the capital asset is sold. An individual can build or purchase a house from the capital gains in the time period of 2 years from selling the house property.

What is the definition of capital gain in India?

Any profit or gain arising from transfer of a capital asset during the year is charged to tax under the head “Capital Gains”. Q.2 What is the meaning of capital asset? Ans. Capital asset is defined to include: a) Any kind of property held by an assessee, whether or not connected with business or profession of the assesse.

What are the rules for computation of capital gains?

Chapter II deals with the scope of taxation of capital gains and the rules of computation of taxable gains and tax thereon. Deductions from the Long­term Capital Gains are discussed in Chapter­ Ill. Chapter-IV contains rules applicable in certain exceptional cases.

How are long term capital gains taxed when you sell a house?

Long Term Capital Gains – If your have sold your house after a three year period from the time of purchase, then any profits from the sale is considered to be a long-term capital gain. Following indexation, this gain will incur a tax of 20%.

How is long term capital gain calculated in India?

Long Term Capital Gain is calculated by deducting the sum of the following costs from the final sale price of the house: *Applicable only for those Shares that are sold through stock exchanges in India on which the Security Transaction Tax (STT) has already been paid The tax rates listed in the table above are excluding surcharge.