cap gains

Provisions of Capital Gains Under Taxation Act 1961 Capital gains should be taken to mean profits or gains arising to the assessee from the ‘transfer’ of a ‘capital asset’.

"Capital asset " means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include (i) Any stock-in-trade, consumable stores or raw materials held for the purposes of his business or profession (ii) !ersonal effects, that is to say, moable property (including wearing ap parel and furniture,  but e#cluding $ewellery) held for personal use by the assessee or any member of his family dependent on him. %#planation & 'or the purposes of this sub-clause, "ewellery" "ewellery" includes - (a) rnaments made of gold, siler, platinum or any other precious metal or any alloy containing one or more of such  precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel (b) !recious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel (iii) Agricultural land in *ndia, not being land situate (a) *n any area which is comprised within the $urisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the releant figures hae been  published before the +st day of the preious year or (b) *n any area within such distance, not being more than eight kilometers k ilometers from the local limits of any municipality or cantonment board referred to in item (a), as the entral oernment may, haing regard to the e#tent of, and scope for, urbanisation of that area and other releant considerations, specify / in this behalf by notification in the fficial a0ette (i) 1 +2 per cent old 3onds, +455,  or 5 per cent old 3onds, +46/, 7ational 8efence old 3onds, +46/, issued by the entral oernment () 9pecial 3earer 3onds, +44+, issued by the entral oernment (i) old 8eposit 3onds issued under the old 8eposit 9cheme, +444 notified by the entral oernment

Short-term and long-term capital assets-

apital assets hae been subdiided into two categories i0. :short-term capital assets; and longterm capital assets;. 9ec (4A) defines a long term capital asset; as meaning a capital asset which is not a short term asset. 1 months preceding the date of its transfer;. As regards holdings of shares, units, securities, or a 0ero coupon bond, the period of holding any capital asset has been statutorily reduced to + months. 1 months, otherwise the capital asset becomes a short-term capital asset. Transfer-sec.!"#$

apital gains arise only on the transfer of a capital asset. 9ec (=5) defines the transfer in relation to a capital asset, and in sec.=? ()-(?) whereby certain transactions, by implication, hae been treated as case of transfer although normally those might not be so treated.