Capital Gain

Pre Budget Recommendations of Income Tax for Union Budget, 2020

Income Tax - As we all are aware that The Union Budget for 2020-21 will be presented in the Lok Sabha on 1st February, 2020) at 11.00 am by our Finance Minister Nirmala Sitharman. As per every year, this year also Institute of Chartered Accountants of India has submitted its Pre Budget Memorandum to the government. Today we […]...

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‘Undervalued’ vs ‘Understated’ Capital Asset- Fiction of Fair Value

Income Tax - It is a well settled and in substance a legal precedent that what is subject to tax is a real income. The principle of real income has been subject matter of intrinsic litigation in past and the possibility of probable dispute on the scope of what constitutes real income in days to come cannot be completely ruled out despite there have be...

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All About Speculative Business and Speculative Transactions

Income Tax - Article explains 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, Recognised stock exchange for Section 43(5), Recognised association for Section 43(5), What are the Eligible Transaction for Commodity ...

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An Overview of Tax on Capital Gain

Income Tax - In this article author is trying to discuss certain things regarding capital gains such as how to calculate indexed cost of acquisition, indexed cost of improvement, what is the latest cost inflation index, certain important exemptions from long term capital gains, etc...

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Agriculture land and Income Tax… Confusing yet clear

Income Tax - Friends, In my view, Capital Gain has more debatable issues than any other source of income under the Income Tax. Today in this article I have tried to take one such issue under the capital gain. The issue is taxability of Agriculture Land. Broadly, there are two categories, For Income Tax purpose, in which the […]...

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Draft Notification on Tax on Long Term Capital Gain on Shares

Income Tax - Finance Act, 2018 has withdrawn the exemption under clause (38) of section 10 of the Income-tax Act, 1961 (the Act) and has introduced a new section 112A in the Act, to provide that long term capital gains arising from transfer of a long-term capital asset being an equity share in a company or a unit of an equity oriented fund or a unit o...

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Amend Sec. 47(viab) related to indirect transfer of capital asset situated in India

Income Tax - The Finance Act, 2015 has amended provisions dealing with indirect transfer of capital asset situated in India. The amendment provides clarity on certain contentious aspects with regards to taxation of income arising or accruing from such indirect transfers....

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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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Section 54 exemption on Construction over leasehold land

Shri Shivakumar Kheny (HUF) Vs The Income Tax Officer (ITAT Bangalore) -  Requirement of section 54 in the second limb is that capital gain should be used in construction of residential house and nothing more. Assessee in the instant case was the owner of super-structure constructed by utilizing capital gain and it was clear from the lease deed by which land over which ...

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Unutilized amount in Capital Gain A/c can be withdrawn post Tax deduction

Prof. P. N. Shetty Vs ITO (Karnataka High Court) - Prof. P. N. Shetty Vs ITO (Karnataka High Court) If only a part of the amount deposited in the Capital Gains Account Scheme is utilized for the construction or purchase of a new asset within the specified time, income tax is chargeable on the unutilized amount. That is why the learned Single Judge, ...

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No transfer u/s 2(47)(v) in absence of possession of land to JDA

ITO Vs State Bank of India Staff Vaibhav Co-op. HSG. Ltd. (ITAT Mumbai) - Since possession of land was not handed over to the Developer by assessee-society, therefore, there could not be any transfer within the meaning of section 2(47)(v) read with section 53A of Transfer of Property Act, 1882, even based on part performance of the contract. Accordingly. there was no liab...

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Section 54 deduction cannot be denied for mere non-deposit in capital gain account

Venkata Dilip Kumar, Kartha-HUF Vs CIT (Madras High Court) - Venkata Dilip Kumar,Kartha-HUF Vs CIT (Madras High Court) No doubt, Section 54 (2) contemplates that if the amount of the capital gain is not appropriated by the assessee towards purchase of new assets within one year before the date on which the transfer of original asset took place or which is not...

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Tax on Giving up of rights on flats in favour of developer within 36 months of date of JDA

Sri Suresh C. Vs DCIT (ITAT Bangalore) - Consideration of 14 flats for giving up related rights in favour of developer was received by assessee within a period of three years from the date of JDA. In such circumstances, concerned flats assumed the character of ‘short-term’ capital asset and gain on such transfer was rightly assessed by...

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Draft notification for determination of FMV of inventory converted in Capital Assets

Clause (via) in section 28 is inserted by Finance Act, 2018, w.e.f. Financial year 2018-19 and it provides taxation of Inventory in the year in which it is converted in capital Assets. CBDT issued Draft of notification to be issued for amending Income-tax Rules, 1962 for prescribing the manner of d...

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24 FAQs on Taxation of Long Term Capital Gain on Shares

F.No. 370149/20/2018-TPL - (04/02/2018) - Since the introduction of the Finance Bill, 2018 on 1st February, 2018, several queries have been raised in different fora on various issues relating to the proposed new tax regime for taxation of long-term capital gains. The responses to these queries are provided below....

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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 [S.O. 1790(E)] - (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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Recent Posts in "Capital Gain"

Pre Budget Recommendations of Income Tax for Union Budget, 2020

As we all are aware that The Union Budget for 2020-21 will be presented in the Lok Sabha on 1st February, 2020) at 11.00 am by our Finance Minister Nirmala Sitharman. As per every year, this year also Institute of Chartered Accountants of India has submitted its Pre Budget Memorandum to the government. Today we […]...

Read More
Posted Under: Income Tax | ,

‘Undervalued’ vs ‘Understated’ Capital Asset- Fiction of Fair Value

It is a well settled and in substance a legal precedent that what is subject to tax is a real income. The principle of real income has been subject matter of intrinsic litigation in past and the possibility of probable dispute on the scope of what constitutes real income in days to come cannot be completely ruled out despite there have be...

Read More
Posted Under: Income Tax |

All About Speculative Business and Speculative Transactions

Article explains 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, Recognised stock exchange for Section 43(5), Recognised association for Section 43(5), What are the Eligible Transaction for Commodity ...

Read More
Posted Under: Income Tax |

An Overview of Tax on Capital Gain

In this article author is trying to discuss certain things regarding capital gains such as how to calculate indexed cost of acquisition, indexed cost of improvement, what is the latest cost inflation index, certain important exemptions from long term capital gains, etc...

Read More
Posted Under: Income Tax |

Agriculture land and Income Tax… Confusing yet clear

Friends, In my view, Capital Gain has more debatable issues than any other source of income under the Income Tax. Today in this article I have tried to take one such issue under the capital gain. The issue is taxability of Agriculture Land. Broadly, there are two categories, For Income Tax purpose, in which the […]...

Read More
Posted Under: Income Tax |

Exemption from capital gains on sale of equity shares

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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Posted Under: Income Tax |

What investors 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...

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Posted Under: Income Tax |

Section 54 exemption on Construction over leasehold land

Shri Shivakumar Kheny (HUF) Vs The Income Tax Officer (ITAT Bangalore)

 Requirement of section 54 in the second limb is that capital gain should be used in construction of residential house and nothing more. Assessee in the instant case was the owner of super-structure constructed by utilizing capital gain and it was clear from the lease deed by which land over which construction had been put up was given o...

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Taxability on Conversion of Private Limited Company To LLP

The LLP is one the popular mode of doing the business in India. The LLP Act has provided to convert a private limited company to LLP. The Income tax Act 1961 also has been amended by inserting the provisions related to such conversion. When there is transfer, from one person to another person, the transferor […]...

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Posted Under: Income Tax |

Income Tax on Joint Development: Post amendment scenario

The concept of joint development agreement is common now a days because of its advantage of bringing together of both landlords and the developer. The landlord who has land with insufficient funds to develop such land can reap the benefit of current market price after the development. Always the price for developed property is greater [&h...

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Posted Under: Income Tax |

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