Category Archives: Capital Gain Tax

Section 54D: Capital Gain on Compulsory Acquisition of Land and Building of an Industrial Undertaking

Capital gains arising on the compulsory acquisition of any land or building forming a part of an industrial undertaking are exempt subject to the following requirements: Such land or building was used by the assessee for the purpose of industrial undertaking for two years preceding the date of compulsory acquisition, The assessee has purchased any… Read More »

Section 45(3): Capital Gain on Transfer of Capital assets by a partner to a firm or by a member to Association of Persons, etc.

Though under the general law, firm does not have a distinct legal identity apart from its partners, under the Income-tax Act, transfer of a capital asset by the partner to a firm or by a Member of Association of Persons to the Association of Persons (AOP) by way of capital contribution or otherwise is chargeable… Read More »

Section 45(2): Income Tax Treatment of Capital Gain arising from the transfer (conversion) of a capital asset into stock-in-trade

Whenever any capital asset is converted into stock-in-trade by an assessee, it attracts the provisions of S. 45(2). Capital gain arising from the transfer (conversion) of a capital asset into stock-in-trade shall be charged to tax in the P.Y. in which stock-in-trade is sold or otherwise transferred. The consideration in such case shall be the fair… Read More »

Section 55: Meaning of Cost of improvement

Cost of Improvement mean all expenditure of capital nature incurred in making additions or alterations to the capital asset. However, any expenditure which is deductible in computing the income under the heads Income from House Property, Profits and gains from Business and Profession or Income from other sources (Interest on Securities) would not be taken… Read More »