|Nature of Asset||Short Term Capital Asset||Long Term Capital Asset|
|(i) Shares in a company or any other security listed in a recognised stock exchange in India or a unit of a Unit Trust of India or a unit of a mutual fund specified under section 10(23D).||Held for not more than 12 months.||Held for more than 12 months.|
Assets other than assets mentioned in (i)
|Held for not more than 36 months.||Held for more than 36 months.|
Subject to certain exceptions, capital gain is computed in the following manner :- Capital Gain = ( Full value of consideration received or accrued on transfer of capital asset) - ( Cost of acquisition of capital assets + Cost of improvement of capital assets + Expenditure incurred wholly and exclusively in connection with the transfer of capital asset such as stamp duty, registration charges, legal fees, brokerage etc.)
In respect of long term capital assets, cost of acquisition and cost of improvement should be worked out as under:-
Cost inflation index of the year of improvement The cost inflation index is notified by the Central Govt. for every year and it is given on Tax information page of this site.
Depending upon the nature of the capital asset and the manner of utilisation of the consideration received on transfer, various exemptions are available. For full details, Sections 54, 54B, 54D, 54EA, 54EB,54EC, 54F, 54G and 54H of the Income-tax Act may please be referred. The provision of 54EA and 54EB has been withdrawn with effect from 1.4.2000 and new section 54 EC has been inserted.
Under Section 54EC investments should be made in: National Highways Authority of India & Rural Electrification Corporation Limited.
|Financial Year||Cost Inflation Index|