Income under the capital gains

Chargeability

If the requirements below are met, capital gains will be subject to tax:-

  (a) A capital asset should be present. In other words, the transferred asset should qualify as a capital asset as of the transfer date;

  (b) The transfer must have been made by the taxpayer during the prior year;

  (c) Profits or gains should emerge from the transfer.

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What is a capital asset?

By definition, a capital asset includes:-

(a) Any type of property that an assessee owns, whether or not it is related to their place of employment or place of business.

(b) Any assets held by a FII that has acquired them in accordance with the provisions of the SEBI Act of 1992.

However, the following are not considered capital assets:-

(a) Trade in goods, consumable stocks, and raw resources stored for trade or profession;

(b) Movable property owned by the taxpayer for his personal use or the use of any family members who are dependent on him. However, even if utilised for personal reasons, jewellery, expensive stones, and decorations made of silver, gold, platinum, and any other precious metal, archaeological collections, drawings, paintings, sculptures, or any other work of art will be regarded as capital assets;

(c) Special Bearer Bonds and Specified Gold Bonds;

(d) India's agricultural land, not being a land situated-

      (1) within the authority of the municipality, the notified area committee, the town area committee, and the cantonment board, which has a minimum population of 10,000;

      (2) Within the following range, as defined by the aerial distance from any municipality's or cantonment board's local limits:

   (i) not exceeding 2 kilometres, if the population of the region is greater than 10,000 but not greater than 1 lakh;

   (ii) not exceeding 6 KM if the population of the region is greater than 1 lakh but not greater than 10 lakhs; or

  (iii) if there are more than 10 lakh people living in the region, the distance must not exceed 8 kilometres.

(e) Gold Monetization Scheme deposit certificates from 2015.

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