Q. Consider the following statements in reference to the Capital Gains Tax
Which of the statements given above is/are correct?
Q. Consider the following statements in reference to the Capital Gains Tax
Which of the statements given above is/are correct?
The correct option is D 1, 2 and 3
Explanation:
Statement 1 is correct: Profits or gains arising from the sale of a capital asset are called “Capital Gains” and are charged to tax under the head of Capital Gains. The agricultural land situated in rural areas is not considered as capital assets under income tax laws. Hence the gains from the sale of such land are not considered capital gains.
Statement 2 is correct: Some assets are considered short-term capital assets when they are held for 12 months or less. Listed government securities fall under this category. Hence, if sold after 12 months, they will be liable to long-term capital gains tax.
Statement 3 is correct: The inherited property is not considered as sold but just a transfer of the property. Hence, capital gains tax doesn't apply to it.
Explanation:
Statement 1 is correct: Profits or gains arising from the sale of a capital asset are called “Capital Gains” and are charged to tax under the head of Capital Gains. The agricultural land situated in rural areas is not considered as capital assets under income tax laws. Hence the gains from the sale of such land are not considered capital gains.
Statement 2 is correct: Some assets are considered short-term capital assets when they are held for 12 months or less. Listed government securities fall under this category. Hence, if sold after 12 months, they will be liable to long-term capital gains tax.
Statement 3 is correct: The inherited property is not considered as sold but just a transfer of the property. Hence, capital gains tax doesn't apply to it.
