Meaning and Definitions

What is meant by Capital Gains ?

Capital Gains means, any profits arising from the transfer of Capital Asset affected in the previous year will be chargeable to income tax under the head ‘Capital Gains’. A capital gain may be short-term or long-term.

Defining Capital Assets:

As per section 2(14), a Capital Asset means –     

  1. Property of any kind held by an assessee, whether or not connected with his business or profession;
  2. Any securities held by a Foreign Institutional Investor which has invested in such securities in accordance with the SEBI regulations.

However, it does not include the following:

  1. Any stock, consumables or raw material, held for the purpose of business or profession
  2. Personal goods such as clothes and furniture held for personal use
  3. Agricultural land in rural India
  4. 6½% gold bonds (1977) or 7% gold bonds (1980) or national defence gold bonds (1980) issued by the central government
  5. Special bearer bonds (1991)
  6. Gold deposit bond issued under the gold deposit scheme (1999) or deposit certificates issued under the Gold Monetisation Scheme, 2015.

Note:

  1. However, jewellery, archaeological collections, drawings, paintings, sculptures, or any work of art are not treated as personal effects and, hence, are included in the definition of capital assets.
  2. ‘Property’ includes and shall be deemed to have always included any rights in or in relation to an Indian company, including rights of management or control or any other rights whatsoever.
  3. Rural Agriculture Land means not being land situate –
    • agricultural land situated in any area within the jurisdiction of a municipality or cantonment board having population of not less than 10,000 or
    • agricultural land situated in any area within such distance, measured aerially, in relation to the range of population as shown hereunder –
  Shortest aerial distance from the local limits of a municipality or cantonment board referred to in item Population according to the last preceding census of which the relevant figures have been published before the first day of the previous year.
(i) ≤ 2 kilometers > 10,000 ≤ 1,00,000
(ii) ≤ 6 kilometers > 1,00,000 ≤ 10,00,000
(iii) ≤ 8 kilometers > 10,00,000

36 thoughts on “Meaning and Definitions

  • samarendra raiguru says:

    You still dont have as yet a facility to upload shares transaxtions or to reflect capital gains under shares and Mutual fund transations

    • Neha@emudhra says:

      Thanks for writing to us. Entry for Capital Gains is enabled, kindly have a check and proceed further with your return filing.

  • Kandathil Paul Mathew says:

    I disposed off some shares and mutual fund holdings last financial year. Down loaded from the ICICI Direct website the capital gain/losses from these trades. How are these to be reflected in the return?
    Incidentally, though capital gains in mentioned in your tax filing form, there is no provision to make any entries against it.
    Kindly advise.

    • Neha@emudhra says:

      Thanks for writing to us. Please download the script wise upload excel, and then the data entry can be done.

  • Rajendra Rajkotia says:

    My id is rajendraraj
    In Capital Gains – I have shares which i sold in the last Financial Year.
    In the taxsmile i can not add the details of sale of shares as there is no “ADD” button visible
    Please help

    Also please share your contact number and email ID

    • Neha@emudhra says:

      Thanks for writing to us. Entry for Capital Gains is enabled, kindly have a check and proceed further with your return filing.

  • I am regular user of your portal and have been filing returns through you for the last 5years. While trying to file returns for this year, I find that you have pre-populated capital gains with zero value. I have made some short term and long term capital gains in the stock market. Where should I account for these.

    • Neha@emudhra says:

      Thanks for writing to us. Entry for Capital Gains is enabled, kindly have a check and proceed further with your return filing.

  • Charumitra Salvi says:

    Hello,
    I need to add LTCG from Equities. I can’t see button for adding Sale of Shares and MF.

    Please guide.

    Regards,

    • Neha@emudhra says:

      Thanks for writing to us. Entry for Capital Gains is enabled, kindly have a check and proceed further with your return filing.

  • Sudhakar Jadhav says:

    ITR – II yet not uploaded. Could
    not file returns as capital gain
    section not updated

    • Neha@emudhra says:

      Thanks for writing to us. Entry for Capital Gains is enabled, kindly have a check and proceed further with your return filing.

  • Frederick J Dsouza says:

    I had been alloted 20 tax free bonds of IRFC in Feb 2014. I have sold these bonds in the market online FY 2019-20.
    What are the tax implications?

    • If there is any capital gain on transferring tax- free bonds on stock exchanges, they will be taxed. If the holding period is less than 12 months, capital gains on sale of tax-free bonds on stock exchanges are taxed as per the income tax slab rate of the investor. If bonds are held for more than 12 months, the gains are taxed at 10 per cent plus cess (without benefit of indexation) or at 20 per cent with indexation benefit.

      • Frederick J Dsouza says:

        Thanks for the guidance…

  • JAYANTO SENGUPTA says:

    Capital gains from sale of shares and Mutual funds not activated

    • Neha@emudhra says:

      Thanks for writing to us. Entry for Capital Gains is enabled, kindly have a check and proceed further with your return filing.

  • JAYANTO SENGUPTA says:

    When will the Capital Gains from Sale of shares and mutual funds be activated?

    • Neha@emudhra says:

      Thanks for writing to us. Entry for Capital Gains is enabled, kindly have a check and proceed further with your return filing.

  • L Ram Saini says:

    How to calculate capital gains on sale of shares online.

    • Neha@emudhra says:

      Thanks for writing to us. Please enter the Share details in Capital Gains – Share and Mutual Funds section in Taxsmile to calculate the Capital Gains.

  • Thiagarajan says:

    What is the status of the Capital Gains module for A.Y 20-21?

    • Neha@emudhra says:

      Thanks for writing to us, entry for Capital Gains is enabled for AY 2019-20. Kindly have a check and proceed further with your return filing.

  • Link to enter capital gains from share sale is disabled. How can it be enabled?

    • Neha@emudhra says:

      Thanks for writing to us. Entry for Capital Gains is enabled, kindly have a check and proceed further with your return filing.

  • AVL NARASIMHA RAO says:

    you have not activated the capital gains on shares in do it yourself pl confirm when are you doing.

    • Neha@emudhra says:

      Thanks for writing to us. Entry for Capital Gains is enabled, kindly have a check and proceed further with your return filing.

  • Vijay Kumar Singh says:

    I want to know the exact rate of taxes for capital gains

  • ITR return form is not enabled for filling capital gains for the year 2019. I am receiving mails from you for filing my return. But Capital gains can not be filled

    • Neha@emudhra says:

      Thanks for writing to us. Entry for Capital Gains is enabled, kindly have a check and proceed further with your return filing.

  • Leslie DSouza says:

    There is no “Add” icon to include Capital gains on shares & mutual funds in the preparation of ITR. Please check and update. Hope it is resolved ASAP so that we can file the return before due date.

    • Neha@emudhra says:

      Thanks for writing to us. Entry for Capital Gains is enabled, kindly have a check and proceed further with your return filing.

  • Viruru S Subbarao says:

    i HAVE CAPITAL GAINS FROM MUTUAL FUNDS, SHORT TERM AND LONG TERMIN ADDITION TO PENSION AND BANK INTEREST SHOULD I USE ITR-1 or ITR-2

    • Neha@emudhra says:

      Thanks for writing to us. You should file your return with ITR 2.

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