What is Transfer – Section 2(47)

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 to gas leak. If he had insured his house, the money received from insurance claim would be taxable.


  • The compulsory acquisition thereof under any law;

For e.g., Government acquired many house properties and other properties for the project of National Highway in Himachal Pradesh. The money thus received in exchange of their properties is taxable under the head “capital gain”.


  • The conversion of Capital Asset into Stock-In-Trade;

For e.g., Mr. Sharma who owns a jewelry shop converted his own jewelry which is a capital asset as stock-in-trade for the purpose of selling it in the normal course of his business. This conversion will be termed as transfer for the purpose of Capital Gains.


  • The maturity or redemption of zero-coupon bonds;

Zero-coupon bonds are issued by the government at 0% interest, which is issued at a discounted rate and redeemed at par value.

For e.g., Let’s say government started a project on metro rail for 10 years. But till the completion of this project government will not generate any revenue. Due to this they issued zero-coupon bonds. Let’s assume that the issuing amount was Rs. 100 and after 10 years it will be for Rs.1,000. Here, the zero-coupon bond is the capital asset, so the difference earned at the time of redemption (transfer for the purpose of Capital gain) will be chargeable to tax under the head “Capital gain”.


  • The transfer of immovable property through Power of Attorney;

Power of Attorney reflects your right in that property.


  • Any transaction which has the effect of transferring or enabling or enjoyment of any immovable property.


Disclaimer: The above-mentioned cases are illustrative and not exhaustive. This article is only for discussing general issues and hereby we do not express any opinion or give any consultation in whatsoever manner understood. The cases may differ from assessee to assessee. We recommend you to take expert advice depending upon your particular case.

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