Tax Book 2023

Capital Gains Chapter- 12

Section

Topic covered

Rule (For CAF-6 AND ICMAP students)

37 Capital assets

Procedure to determine capital gain

37A 13F & 13H Gains on sale of securities

100B

Special provision relating to capital gain tax on securities [with Eight Schedule]

Loss u/s 37 & 37A

11, 50, 51

& 101

Geographical source of capital gains & their taxability

Capital gain exempt from tax

Treatment of bonus shares

Disposal

MCQ’s with solutions

Practice questions with solutions

ICMAP & CA past papers theoretical questions

For CAF- 6 and ICMAP students

1. Definition

A gain arising on the disposal of a capital asset by a person in a tax year, (except exempt gain)

shall be chargeable to tax under the head capital gains.

Taxation of capital assets is split into two categories as:

A. Capital assets u/s 37.

B. Capital assets u/s 37A.

1.1 Capital assets: [Section 2(10) and 37(5)]

Capital asset means property of any kind held by a person, whether or not connected with a

business, but does not include the following:

Any stock-in-trade, consumable stores or raw materials held for the purpose of business;

Any depreciable and intangible property; or

Any movable property [(excluding the capital assets defined in section 38(5)] held for personal

use by the person or any member of the person’s family dependent on the person. U/s 38(5)

has stated the following are capital assets:

 A painting, sculpture, drawing or other work of art;

 Jewellery;

 A rare manuscript, folio or book;

 A postage stamp or first day cover;

 A coin or medallion; or

 An antique.

12 Capital gains

Chapter