Studyhatch Forum -Income Tax

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?As per the Income-tax Law, gain arising on transfer of capital asset is charged to tax under the head ?Capital gains?. What constitutes ?transfer?
Solution

Generally, transfer means sale, however, for the purpose of Income-tax Law "Transfer?, in relation to a capital asset, includes: i. Sale, exchange or relinquishment of the asset; ii. Extinguishment of any rights in relation to a capital asset; iii. Compulsory acquisition of an asset; iv. Conversion of capital asset into stock-in-trade; v. Maturity or redemption of a zero coupon bond; vi. Allowing possession of immovable properties to the buyer in part performance of the contract; vii. Any transaction which has the effect of transferring an (or enabling the enjoyment of) immovable property; or viii. Disposing of or parting with an asset or any interest therein or creating any interest in any asset in any manner whatsoever.

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