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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Sec. 54F Allowability of investment in new residential property in the name of spouse

Kaushal Kishore Maheshwari Vs ACIT (ITAT Delhi) - 1. That on the facts and circumstances of the case and in law, the learned Commissioner (Appeals), XXVIII, New Delhi [hereinafter referred to as the learned CIT(A)] has grossly erred in denying the exemption to the Appellant under section 54F of the Income Tax Act, 1961....

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ITAT Judgment on year of taxability in case of JDA

ITO & Anr. Vs Shafiq Mohammed Shah & Anr. (ITAT Chennai) - These cross appeals by the Revenue and by the assessee are directed against the order of the Commissioner (Appeals)-4,Chenaai dated 8-2-2016....

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Capital gain from penny stocks not bogus for violation of SEBI regulations by broker

ITO Vs. Arvind Kumar Jain HUF (ITAT Mumbai) - Where assessee’s broker share transaction was bone fide in all respect, merely because share broker was tainted violating SEBI regulations, would not make assessee’s share transactions bogus....

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Deal cancellation compensation expense cannot be claimed from Capital Gain

Kodanda Ramaiah Varadhi Vs ITO (ITAT Visakhapatnam) - Under the head Capital gains only direct expenses relatable to transfer of property are allowed as deduction. Therefore, the cancellation expenses should not be held to be incurred either for acquiring the property or for transfer of property...

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No Transfer U/s 2(47) if JDA is not registered: SC

CIT Vs Balbir Singh Maini (Supreme Court of India) - There is no contract in the eye of law in force under Section 53A after 2001 unless the said contract is registered. This being the case, and it being clear that the said JDA was never registered, since the JDA has no efficacy in the eye of law, obviously no transfer can be said to have taken place ...

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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"

Sec. 54F Allowability of investment in new residential property in the name of spouse

Kaushal Kishore Maheshwari Vs ACIT (ITAT Delhi)

1. That on the facts and circumstances of the case and in law, the learned Commissioner (Appeals), XXVIII, New Delhi [hereinafter referred to as the learned CIT(A)] has grossly erred in denying the exemption to the Appellant under section 54F of the Income Tax Act, 1961....

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ITAT Judgment on year of taxability in case of JDA

ITO & Anr. Vs Shafiq Mohammed Shah & Anr. (ITAT Chennai)

These cross appeals by the Revenue and by the assessee are directed against the order of the Commissioner (Appeals)-4,Chenaai dated 8-2-2016....

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Capital gain from penny stocks not bogus for violation of SEBI regulations by broker

ITO Vs. Arvind Kumar Jain HUF (ITAT Mumbai)

Where assessee’s broker share transaction was bone fide in all respect, merely because share broker was tainted violating SEBI regulations, would not make assessee’s share transactions bogus....

Read More

Deal cancellation compensation expense cannot be claimed from Capital Gain

Kodanda Ramaiah Varadhi Vs ITO (ITAT Visakhapatnam)

Under the head Capital gains only direct expenses relatable to transfer of property are allowed as deduction. Therefore, the cancellation expenses should not be held to be incurred either for acquiring the property or for transfer of property...

Read More

No Transfer U/s 2(47) if JDA is not registered: SC

CIT Vs Balbir Singh Maini (Supreme Court of India)

There is no contract in the eye of law in force under Section 53A after 2001 unless the said contract is registered. This being the case, and it being clear that the said JDA was never registered, since the JDA has no efficacy in the eye of law, obviously no transfer can be said to have taken place under the aforesaid document....

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Section 2(47) no transfer by Mere entering in Development agreement

Rukiyabanu Gullam Mohiuddin Ahmedji & Anr. Vs CIT (ITAT Mumbai)

Admittedly, possession of the property was not handed over during assessment year 2008-09 and mere execution of agreement for the development of the property could not amount to transfer under section 2(47) of the Act row with section 53A of the transfer of property Act are satisfied as such there can no transfer be considered in the year...

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Final occupation date to calculate Purchase date for section 54F exemption allowed

Smt Ramita Mahendra Mehta Vs Income Tax officer (ITAT Mumbai)

This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) -20, Mumbai dated 17.04.2014 for the Assessment Year 2010-11. The only grievance of the assessee in his appeal is that the Ld.CIT(A) erred in denying the deduction u/s 54 of the Act....

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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...

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