Capital Gain

What every investor needs to know about Capital Gains Account Scheme?

Income Tax - Mr Chaudhury has just sold his old ancestral house for a lump sum consideration of Rs. 20,00,000. He has now set his eyes on a new apartment which is due for possession within the next two years. Mr. Chaudhury is in a dilemma, he is aware that the amount he has received is a Capital Gain in his hands and is liable to tax. His intention is...

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Exemption from capital gains on sale of equity shares – Misuse and Amendment

Income Tax - Earlier to Finance Act 2017, section 10(38) of Income Tax Act provided opportunity to tax-evaders. It provided the exemption of tax on the capital gains arising on sale of equity shares after one year of its acquisition, if transaction was chargeable to securities transaction tax (STT)....

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Family Arrangement

Income Tax - We see many big business houses run by second or third generation families with different ideologies or intending to diversify their businesses. Occasionally, it leads to separation of business and to family disputes. While most settle the issues amongst themselves, some families drag them to court....

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Snippet on taxability of capital reduction

Income Tax - Capital reduction is a commonly adopted tool by companies for re-engineering their capital structure. The need for reducing share capital may arise owing to a number of reasons, such as returning excess funds to the shareholders, adjustment of accumulated losses, minority squeeze out, improving EPS, producing a more efficient capital stru...

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Cash dividend no longer the king

Income Tax - The corporates today are rewarding their shareholders in various fashionable ways like Bonus shares (equity and preference shares), bonus debentures, buyback, etc. These modes of distribution could prove to be more efficient than conventional method of distribution i.e. cash dividend....

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Draft rules on valuation of ‘unquoted shares’ for Sec. 56(2)(x)/50CA

Income Tax - CBDT has released the draft rules prescribing ‘unquoted shares’ valuation for purposes of Sec. 56(2)(x)/50CA (an important development impacting corporate restructuring) inviting comments from public....

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India and Singapore Sign a Third Protocol for Amending DTAA

Income Tax - Third Protocol amends DTAA with effect from 1st April, 2017 to provide for source based taxation of capital gains arising on transfer of shares in a company....

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Tax on Income/Loss arising from Transfer of Unlisted Shares-reg.

Income Tax - CBDT, vide order dated 2nd May, 2016 has given direction to field formation, with a view to avoid disputes/Litigation and to maintain uniform approach that the income arising from transfer of unlisted shares, irrespective of period of holding, would be taxable under the head ‘Capital Gain’ except in certain circumstances where the Ass...

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Provide Clarity on Taxability of Surplus on Sale of Shares & Securities – Capital Gains or Business Income

Income Tax - As regards shares and other securities, the same can be held either as capital asset or stock-in-trade / trading asset or both. However, the Act does not contain any specific guidelines as to the characterisation of any particular investment as capital asset or stock-in-trade / trading asset. While this characterisation is essentially a f...

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Taxation of income from off-shore Rupee Denominated Bonds-reg.

Income Tax - The Reserve Bank of India has recently permitted Indian corporates to issue rupee denominated bonds outside India. The matter of taxation of income from such bonds under Income-tax Act, 1961 has been considered by the Government. In so far as taxation of interest income from these INR off-shore bonds in the case of non-resident investors ...

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Loss on Mutual Fund sale is Business Loss for assessee engaged in share trading business

M/s. Cosmos International Ltd. Vs ITO (ITAT Delhi) - Assessee is engaged in the business of trading in securities and shares. In the year under consideration the assessee suffered a loss of Rs. 29,82,952/- on the sale of Mutual Fund which was held as stock in trade and as such claimed as business loss. The issue in this case is whether the amount of R...

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Sale of Leasehold Rights taxable and Section 50C applicable

Income Tax Officer Vs Sh. Chander Shekhar (ITAT Delhi) - Assessee was allotted a residential plot on 19.01.2004 in Sector-105, Noida through lottery on payment of allotment money of Rs.1,30,000/-. The total purchase price of the plot was Rs. 16,75,000/-. 2. The assessee on 28.02.2004 entered into an Agreement to sell in respect of this plot with M/s Roseb...

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Section 54 exemption cant be denied for delayed cheque deposit by builder

ITO (IT) 3(3)(1) Vs Akansha Ranju Pilani (ITAT Mumbai) - In a significant ruling, the Mumbai bench of the Income Tax Appellate Tribunal recently held that if a cheque is encashed by the builder after the deadline for filing income-tax return, it will not debar the taxpayer from claiming I-T exemption under section 54 of the Income Tax Act, which is availa...

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Trust for sole benefit of an individual can claim section 54F deduction

Balgopal Trust Vs. ACIT (ITAT Mumbai) - Issue before us is as to whether the assessee trust, which is for the sole benefit of an individual, will be entitled to deduction u/s. 54F or not, when its status is that of A.O.P. As per Section 54F the benefits of this section is available to individual or Hindu undivided family (HUF). Hon’ble ...

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Full value of consideration used in section 48 does not have reference to market value

Assistant Commissioner of Income Tax Vs Akash Association (ITAT Ahmedabad) - Reference to DVO for determination of market value for the purpose of computation of capital gains under section 48 would be wholly redundant since main thrust of section 48 is the full value of consideration received or accruing as a result of transfer of capital asset and not the fair market value...

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TDS on interest under Capital Gains Accounts Scheme of deceased depositor

Notification No. 08/2017- Income Tax - (13/09/2017) - It has been brought to the notice of CBDT that in cases of deceased depositor who has made deposits under the Capital Gains Accounts Scheme, 1988; the banks are deducting TDS on the interest earned on such deposits in the hand of the deceased depositor and issuing TDS certificates in the name of th...

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CBDT notifies Cost Inflation indexes with Base Year as 2001-02

Notification No. 44/2017-Income Tax - (05/06/2017) - CBDT has vice Notification No. 44/2017 notified Cost Inflation indexes with Base Year as 2001-02 for the Financial Year 2001-02 to 2017-18 and same are applicable from Financial Year 2017-18....

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Gain on sale of unlisted share to be considered as Capital Gain

Letter F.No.225/12/2016/ITA.II - (02/05/2016) - For determining the tax-treatment of income arising from transfer of unlisted shares for which no formal market exists for trading, a need has been felt to have a consistent view in assessments pertaining to such income. It has, accordingly, been decided that the income arising from transfer of unli...

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How to determine holding period of converted shares / Debentures

Notification No. 18/2016- Income Tax - (17/03/2016) - In the case of a capital asset, being a share or debenture of a company, which becomes the property of the assessee due to conversion, there shall be included the period for which the bond, debenture, debenture-stock or deposit certificate, as the case may be, was held by the assessee prior to the c...

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CBDT notifies Cost Inflation Index for Financial Year 2015-16

Notification No. 60/2015 - Income Tax - (24/07/2015) - Notification No. 60/2015 - Income Tax S.O. (E) – In exercise of the powers conferred by clause(v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following further amendments in the notification of the Government of India in the...

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Recent Posts in "Capital Gain"

What every investor needs to know about Capital Gains Account Scheme?

Mr Chaudhury has just sold his old ancestral house for a lump sum consideration of Rs. 20,00,000. He has now set his eyes on a new apartment which is due for possession within the next two years. Mr. Chaudhury is in a dilemma, he is aware that the amount he has received is a Capital Gain in his hands and is liable to tax. His intention is...

Read More
Posted Under: Income Tax |

TDS on interest under Capital Gains Accounts Scheme of deceased depositor

Notification No. 08/2017- Income Tax (13/09/2017)

It has been brought to the notice of CBDT that in cases of deceased depositor who has made deposits under the Capital Gains Accounts Scheme, 1988; the banks are deducting TDS on the interest earned on such deposits in the hand of the deceased depositor and issuing TDS certificates in the name of the deceased depositor, which is not in ac...

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Loss on Mutual Fund sale is Business Loss for assessee engaged in share trading business

M/s. Cosmos International Ltd. Vs ITO (ITAT Delhi)

Assessee is engaged in the business of trading in securities and shares. In the year under consideration the assessee suffered a loss of Rs. 29,82,952/- on the sale of Mutual Fund which was held as stock in trade and as such claimed as business loss. The issue in this case is whether the amount of Rs 29,82,952/- on account of loss on sale...

Read More

Exemption from capital gains on sale of equity shares – Misuse and Amendment

Earlier to Finance Act 2017, section 10(38) of Income Tax Act provided opportunity to tax-evaders. It provided the exemption of tax on the capital gains arising on sale of equity shares after one year of its acquisition, if transaction was chargeable to securities transaction tax (STT)....

Read More
Posted Under: Income Tax |

Family Arrangement

We see many big business houses run by second or third generation families with different ideologies or intending to diversify their businesses. Occasionally, it leads to separation of business and to family disputes. While most settle the issues amongst themselves, some families drag them to court....

Read More
Posted Under: Income Tax |

Snippet on taxability of capital reduction

Capital reduction is a commonly adopted tool by companies for re-engineering their capital structure. The need for reducing share capital may arise owing to a number of reasons, such as returning excess funds to the shareholders, adjustment of accumulated losses, minority squeeze out, improving EPS, producing a more efficient capital stru...

Read More
Posted Under: Income Tax |

Cash dividend no longer the king

The corporates today are rewarding their shareholders in various fashionable ways like Bonus shares (equity and preference shares), bonus debentures, buyback, etc. These modes of distribution could prove to be more efficient than conventional method of distribution i.e. cash dividend....

Read More
Posted Under: Income Tax |

All About Speculative Business and Speculative Transactions

Articles discusses how Speculative Business is Distinct Business, What is speculative transaction, What shall not deemed to be speculative transactions, What is Eligible Transaction for security derivative,What are the Eligible Transaction for Commodity derivative,Do Single transaction constitute speculative business, Treatment of Losses ...

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Posted Under: Income Tax |

An Overview of Capital Gain

Capital gains are profits that an investor has made from selling asset like stocks and real estate. Capital gains are differentiated as long-term and short-term for taxation purposes. In India, the definition of capital gains for various asset classes is different....

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Posted Under: Income Tax |

Sale of Leasehold Rights taxable and Section 50C applicable

Income Tax Officer Vs Sh. Chander Shekhar (ITAT Delhi)

Assessee was allotted a residential plot on 19.01.2004 in Sector-105, Noida through lottery on payment of allotment money of Rs.1,30,000/-. The total purchase price of the plot was Rs. 16,75,000/-. 2. The assessee on 28.02.2004 entered into an Agreement to sell in respect of this plot with M/s Rosebud Construction Pvt. Ltd through its Dir...

Read More
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