Below is the full explanation of Capital Gain tax under the Income Tax Act, 1961

CHARGING SECTION: 45(1)

Any profits or gains arising from the transfer of any capital asset shall be chargeable to income-tax as Capital Gains and shall be deemed to be the income of the previous year in which the transfer took place.

We will be discussing the below provision for Computation of Capital Gains and related exemptions:

  1. Capital Asset: [Section 2(14)]
  2. Short-term (STCA) and Long-term Capital Asset (LTCA) and gain or loss
  3. Zero Coupon Bond [Section 2(48)]
  4. Transfer u/s 2 (47)
  5. Indexed Cost of Acquisition (ICA) and Indexed Cost of Improvement (ICI) [Section 48]
  6. Transaction not considered as a Transfer , Exceptions To Transfer  u/s 46 & 47
  7. Cost of Acquisition u/s 55(2)
  8. Deemed Cost of Acquisition
  9. Capital gain in case of amount received from an insurer on account of damage or destruction of any capital asset u/ s 45( 1A)
  10. Capital gain on conversion of capital asset into stock-in-trade u/s 45(2)
  11. Chargeability of Capital Gain on Transfer of Beneficial interest in Securities by the Depository u/s 45(2A)
  12. Capital gain on transfer of capital asset by a partner/member to a firm/AOP/BOI as capital contribution u/s 45(3)
  13. Capital gain on transfer of a capital asset by way of distribution on the dissolution of a firm, AOP, BOI u/s 45(4)
  14. Capital gain on transfer by way of compulsory acquisition of an asset u/s 45(5)
  15. Capital gain on conversion of debentures into shares
  16. Capital gains on distribution of assets by companies in liquidation u/s 46
  17. Capital gain on sale of the goodwill of a business, trademark or brand name, tenancy rights, route permits or loom hours, right to manufacture or right to carry on any business.
  18. Capital Gains U/s 50b In Case Of Slump Sale U/s 2(42C)
  19. Capital gain on repurchase of Units of Mutual Funds under Equity Linked Savings Scheme u/s 45(6)
  20. Capital gains on purchase by company of its own shares or other specified securities u/s 46A
  21. Exemptions of Capital Gains
  22. Tax treatment of Capital Gain on the transfer of shares, debentures of Indian Company held by non-residents    [Section 48 (Proviso) read with Rule 115A].
  23. Conditions and exemption from long-term capital gains on transfer of foreign exchange asset by a Non-Resident Indian [Section 115F]
  24. Tax treatment of income from Deep Discount Bonds (DDBs).
  25. Capital Gains on Sale of Property at less than Government Value. [Sec. 50C]
  26. Advance money received on capital gains [Section 51]
  27. Reference to Valuation Officer [Section 55A]
  28. Exemptions From Capital, Gains For Transfer Of Residential House Property u/s 54
  29. Exemptions Available For Capital Gains On Transfer Of Urban Agricultural Land u/s 54B
  30. Exemptions Available For Capital Gains On Compulsory Acquisition Of Land And Building Used For Industrial Purposes u/s 54D
  31. Exemptions From Capital Gains For Investments In Notified Bonds u/s 54EC
  32. Exemptions From Capital Gains For Transfer Of Any Long Term Capital Asset Other Than A Residential House Property u/s 54F
  33. Exemptions Available For Capital Gains On Shifting Of Industrial Undertaking From Urban To Rural Area u/s 54G
  34. Exemption Available To An Undertaking Which Shifts Its Base To A Special Economic Zone And In The Course Makes Gain On Transfer Of Asset u/s 54GA
  35. Extension Of Time Limit For Acquiring New Asset, When Enhanced Compensation Is Paid u/s 54h
  36. Provisions Relating To Claiming Of Exemption In Order To Reduce Tax Liability On Short Term Capital Gains
  37. Cost In Relation To Certain Financial Assets u/s 55
  38. Dividend Stripping
  39. Bonus Stripping
  40. Rates Of Capital Gain Tax – Section 112