Section 112 – Rate of Tax on Long-Term Capital Gain Section 112 – Tax on long-term capital gains The general rule says, when a capital asset which qualifies to be a long-term capital asset is sold, it is taxed @20% on the capital gains arising on such sale. The treatment of long-term capital … Continue reading “Section 112 – Rate of Tax on Long-Term Capital Gain”
Maintenance, keeping and furnishing of information and document by certain persons. The Section 92D of the Income Tax Act, 1961, requires that every person who has entered into an international transaction or specified domestic transaction shall keep and maintain such information and document in respect of such transactions which are prescribed by the department … Continue reading “Section 92D”
Concept of Indexation Changes in the value of asset according to your living cost is called indexation. The benefit of indexation is available only to long-term capital assets. For computation of indexed cost of acquisition following factors are to be considered: Cost and Year of acquisition &/or improvement Year of transfer Cost inflation index … Continue reading “Concept of Indexation”
What is the meaning of the term Associated Enterprise (AE)? The provisions of transfer pricing will apply only if the transactions happen to between the Associated Enterprises (AE). The term Associated Enterprises is specifically defined by the Income Tax act, 1961 in Section 92A. The definition explains various scenarios when an organization happens to … Continue reading “Meaning of Associate Enterprise in Transfer pricing”
Transfer Pricing – Section 92 What is Transfer Pricing? Transfer pricing is the related to determining the value of goods & services exchanged or transferred between two related parties or related parties situated in other countries. The purpose of transfer pricing is to ensure that the price determined in the following transaction should be … Continue reading “Transfer Pricing – Section 92”
Rate of tax on Short-Term Capital Gains Section 111A Where there are capital gains arising from the transfer of short-term capital asset, being an: Equity share listed in a recognized stock exchange; Units of equity-oriented funds or; A unit of a business trust. The transaction of sale is chargeable to securities transaction tax (STT). Such … Continue reading “Rate of tax on Short-Term Capital Gains Section 111A”
Capital Gains in case of Joint development agreements – Section 45(5A) It is a common procedure nowadays and a win-win situation for both the parties i.e., the land owner and the developer to enter into Joint Development Agreement. Herein, the resources and the efforts of the landowner and the developer are combined together so as … Continue reading “Capital Gains in case of Joint development agreements Section 45(5A)”
Capital Gains in case of Compulsory Acquisition of an asset Section 45(5) What is compulsory acquisition? Compulsory acquisition means, where the government acquires rights in the land, property from an individual or business in order to benefit society such as constructing roads, rails, metros, infrastructure etc. With reference to Section 45(5) In some … Continue reading “Capital Gains in case of Compulsory Acquisition of an asset Section 45(5)”
Long Term and Short-Term Capital Gains People these days are more involved in purchase and sale of properties. The profit or gain arising from sale of these capital assets such as house property, land, buildings shares, bonds, jewelry during a financial year will be charged under the head “income from capital gains”. … Continue reading “Long Term and Short-Term Capital Gains”
What is Transfer – Section 2(47) With reference to Section 2(47) transfer in the terms of capital gains The Sale, exchange or relinquishment (giving up the right of an asset) of the asset. The extinguishment of any rights therein; For e.g., Mr. Raj had a property in Delhi, it got destroyed due … Continue reading “What is Transfer – Section 2(47)”
