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Taxation Exam  >  Taxation Notes  >  Fast Track Quick Revision Income Tax  >  Capital Gain (Section 45 to 55A )- Part - 2

Capital Gain (Section 45 to 55A )- Part - 2

Section 49(4).
Deemed cost of
acquisition where
value is taxed u/h
‘Other Sources’		In case of Land and Building is gifted and S 56(2)(vii) is applicable then COA =Amount taxed under the head OS.
In case of Land and Building is sold and S 56(2)(vii) is applicable then COA =Purchase price + Amount
taxed under the head OS.
In case of JAD PB SAS is gifted and
S 56(2)(vii) is applicable then
COA =		Amount taxed under the head OS.
In case of JAD PB SAS is sold and
S 56(2)(vii) is applicable then
COA =		Purchase price + Amount taxed under the head OS.

 

Expenses on Transfer
Expenditure incurred on transfer of asset. E.g. Brokerage on transfer of asset etc. However STT is ignored

 

Special cases of computation (Deemed Transfer)
 45(1A)45(2)45(3)45(4)45(5)
TitleInsurance
claim on
destruction
of assets.		Conversion
of capital
asset into SIT		Admission
of partner		Retirement
of partner or
dissolution
of firm		Compulsory acquisition
Full value
of consid
eration		Insurance
claim		FMV on the
date of
conversion		Amount recorded
in books of accounts		FMV on the date of distributionInitial compensation
YOCYear of
receipt of
insurance
claim		Year of sale
of SIT		YOTYOTYear of
receipt
of initial
compensation
Index ationYear of
destruction
to Year of
acquisition		Year of
conversion
to Year of
acquisition		Year of transfer to year of acquisitionYear of distribution to
year of acquisition		Year of compulsory acquisition to year of acquisition

 

Section 54 to 54GB

AE = Actual Exemption

ExemptionsYOC = Year of ChargeabilityTE = Temporary exemptionYOT = Year of transferZD = Date of sale of
original asset
 5454B54EC54F54GA
1. TitleRHP transferred
anywhere
in the
world . RHP
acquired in
India		UAL
transferred.
UAL/RAL
acquired		Any LTCA transferred. 2 specified assets acquired.
NHAI+ RECL Lock in 3yrs		Any LTCA
(other than
RHP)
transferred.
RHP acquired.		Acquired
land, building,
plant &
machinery
transferred.
Acquired
LBPM in
SEZ
2. Conditions     
aEligible
Assessee		Ind/HUFIndividual /
HUF		Any assesseeInd/HUFAny assessee
bEligible asset which is being
transferred		RHP+LTCA
located in
India		Urban AG
land
Atleast 2 yr
old
ST / LT		Any LTCAAny LTCA
other RHP		Land, Bldg,
Plant of urban
area
cTime limit
of purchase
new asset		(P)1 yr <--
ZD--
>2(P)/3(C)
yr		ZD-->2 yrs
(P)		ZD-->6
months		(P)1 yr<-
- ZD--
>2(P)/3(C)
yr		(P/C)1 yr<--
ZD-->3(P/C)
yr
dDeposit
scheme		ApplicableApplicableNot ApplicableApplicableApplicable
3. Amount of
exemption		AE / TEAE + TEAE. Max Rs. 50 Lakhs in 2 FYLTCG
--------x RHP
NSC		AE+TE
4. Consequences
1 Deposited amount unutilised		TE –
AE=LT
(YOC =
ZD+3yr)		TE–AE=ST/
LT
(YOC = ZD
+ 2yrs)		NAProportionate
(TE–
AE)=LT
(YOC =
ZD + 3yrs)		TE–AE=ST/
LT
(YOC = ZD
+ 3yrs)
Consequences 2 New asset
transferred within 3 years from
the date of acquisition		LT+ST=ST
YOC=YOT		LT/ST+ST=ST
(YOC=YOT)
*
* Where RAL
is transferred
no capital
gain arises,
since not a
capital asset.		LT=LT
ST=ST
(YOC =
YOT)		LT=LT
ST=ST
(YOC =
YOT)		LT+ST=ST
(YOC = YOT
Other pointsOnly 1 RHP exemption can be claimedAs many AL can be purchased for claiming exemptionAs many specified
asset can be purchased for claiming exemption		If any other
RHP is
acquired
within 2 /
3 year then
exemption
shall be
withdrawn
*		As many
asset can be
purchased
for claiming
exemption

 

* Also on the zero date the assessee should not own more than 2 RHP to claim exemption u/s 54F

 

Cost Inflation Index
1981-821001990-911821999-003892008-09582
1982-831091991-921992000-014062009-10632
1983-841161992-932232001-024262010-11711
1984-851251993-942442002-034472011-12785
1985-861331994-952592003-044632012-13852
1986-871401995-962812004-054802013-14939
1987-881501996-973052005-064972014-151024
1988-891611997-983312006-075192015-161081
1989-901721998-993512007-085512016-171125

 

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FAQs on Capital Gain (Section 45 to 55A )- Part - 2

1. What is a capital gain?
Ans. A capital gain refers to the profit earned from the sale or transfer of a capital asset, such as real estate, stocks, or bonds. It is the difference between the selling price and the cost price of the asset.
2. Are all capital gains taxed?
Ans. Not all capital gains are taxed. In many countries, including the United States, there are certain exemptions and tax rates that apply to capital gains. For example, long-term capital gains, which are gains from the sale of assets held for more than one year, may be taxed at a lower rate than short-term capital gains.
3. What is Section 45 to 55A of the Taxation Act?
Ans. Section 45 to 55A of the Taxation Act refers to the specific provisions that govern the taxation of capital gains. These sections outline the rules and regulations surrounding the calculation, reporting, and taxation of capital gains in a particular jurisdiction.
4. How is the capital gain calculated?
Ans. The capital gain is calculated by subtracting the cost basis of the asset from the selling price. The cost basis includes the purchase price, any additional expenses incurred during the acquisition, and adjustments for factors such as depreciation or improvements made to the asset.
5. Are there any exemptions or deductions available for capital gains?
Ans. Yes, there are exemptions and deductions available for capital gains in many jurisdictions. These may include exemptions for the sale of a primary residence, certain small business stock, or specific types of investments. Additionally, taxpayers may be eligible for deductions on capital losses, which can offset capital gains and reduce the overall tax liability. It is important to consult with a tax professional or refer to the specific tax laws of the jurisdiction to understand the available exemptions and deductions.
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