Description
This is a presentation describes extensively talks about capital asset, depreciable assets, exemptions.
CAPITAL GAINS
Capital Asset
• Property of any kind including movable, immovable, tangible, intangible assets, incorporeal rights. Except:
– Any stock in trade, consumable stores, etc. – Personal effects – Agricultural land not in place with population>10,000 ( agricultural land in rural area)
• “Transfer” includes sale, exchange or relinquishment of asset or extinguishment of rights/compulsory acquisition
Transfer
• Doesn’t include:
– Assets of co. in liquidation – Gift, will – Conversion of bonds/debentures into shares
• Capital assets by duration:
– Long term >36 months ( indexation) – Short term- not more than 36 months
Certain assets
• Shares, securities (debentures, govt securities), units of mutual funds, zero coupon bonds
– Period of holding 12 months – Rights shares, bonus shares
• No indexation for bonds, debentures, depreciable assets. • Exemption of LTCG on shares, units of equity oriented mutual funds – 10 (38) • Compulsory acquisition of urban agri land.
Calculation of capital gains
Full value of consideration Less: transfer expenses cost of acquisition* cost of improvement* ---------------------------------------------Less: Exemptions
Depreciable Assets
• Capital gains/loss only when:
– WDV of block is zero on last day of the year – Block is empty on last day of the year
• Rates of tax
– LTCG: @20%* – STCG : as per any other source of income – STCG (shares, units): @ 15%*
Exemptions
• Sec 54: House property
– Indl, HUF – Long term asset transferred – New property purchased/constructed – Time limits/CGAS – Amount of CG to be invested – New property to be held for atleast 3 years
• Sec 54B: Agricultural land
– Indl, HUF – Land used by taxpayer or parents for 2 years before transfer – Long term or short term – Purchase new agricultural land within 2 years from amt. of capital gains – Hold new land for 3 years
• Sec 54EC: Specified Bonds
– Any person – Transfer of any long term capital asset – Invest in specified asset within 6 months – Bonds issued by NHAI and REC- 3 years – Upto Rs. 50 lakhs – Capital Gains to be invested
• Sec 54F
– Indl, HUF – Transfer of any long term capital asset except residential house – Purchase house within time limit – Should not own more than one house other than new house on date of transfer – Net consideration to be invested – Hold new house for 3 years
• Sec 54G/GA: Transfer of assets from urban to rural area/SEZ
– Plant, machinery, land, building – Within one year before and two years after transfer, purchased new plant and machinery, land, building in rural area/SEZ – Amount of capital gains to be invested – Hold for 3 years
doc_783647845.ppt
This is a presentation describes extensively talks about capital asset, depreciable assets, exemptions.
CAPITAL GAINS
Capital Asset
• Property of any kind including movable, immovable, tangible, intangible assets, incorporeal rights. Except:
– Any stock in trade, consumable stores, etc. – Personal effects – Agricultural land not in place with population>10,000 ( agricultural land in rural area)
• “Transfer” includes sale, exchange or relinquishment of asset or extinguishment of rights/compulsory acquisition
Transfer
• Doesn’t include:
– Assets of co. in liquidation – Gift, will – Conversion of bonds/debentures into shares
• Capital assets by duration:
– Long term >36 months ( indexation) – Short term- not more than 36 months
Certain assets
• Shares, securities (debentures, govt securities), units of mutual funds, zero coupon bonds
– Period of holding 12 months – Rights shares, bonus shares
• No indexation for bonds, debentures, depreciable assets. • Exemption of LTCG on shares, units of equity oriented mutual funds – 10 (38) • Compulsory acquisition of urban agri land.
Calculation of capital gains
Full value of consideration Less: transfer expenses cost of acquisition* cost of improvement* ---------------------------------------------Less: Exemptions
Depreciable Assets
• Capital gains/loss only when:
– WDV of block is zero on last day of the year – Block is empty on last day of the year
• Rates of tax
– LTCG: @20%* – STCG : as per any other source of income – STCG (shares, units): @ 15%*
Exemptions
• Sec 54: House property
– Indl, HUF – Long term asset transferred – New property purchased/constructed – Time limits/CGAS – Amount of CG to be invested – New property to be held for atleast 3 years
• Sec 54B: Agricultural land
– Indl, HUF – Land used by taxpayer or parents for 2 years before transfer – Long term or short term – Purchase new agricultural land within 2 years from amt. of capital gains – Hold new land for 3 years
• Sec 54EC: Specified Bonds
– Any person – Transfer of any long term capital asset – Invest in specified asset within 6 months – Bonds issued by NHAI and REC- 3 years – Upto Rs. 50 lakhs – Capital Gains to be invested
• Sec 54F
– Indl, HUF – Transfer of any long term capital asset except residential house – Purchase house within time limit – Should not own more than one house other than new house on date of transfer – Net consideration to be invested – Hold new house for 3 years
• Sec 54G/GA: Transfer of assets from urban to rural area/SEZ
– Plant, machinery, land, building – Within one year before and two years after transfer, purchased new plant and machinery, land, building in rural area/SEZ – Amount of capital gains to be invested – Hold for 3 years
doc_783647845.ppt