Taxation of Capital Gains S. Krishnan -As Amended by Finance Act 2023

This book provides an in-depth, thorough & chapter-wise analysis of each aspect of capital gains, with the help of ‘relevant’ judicial pronouncements, Circulars & Notifications, illustrations, etc. The book aims to enable professionals for the following:

• Understand various concepts/issues on capital gain
• Guidance on following the proper procedure in reporting the correct income

The Present Publication is the 12th Edition and has been amended by the Finance Act 2023. This book is authored by CA S. Krishnan with the following noteworthy features:

• [Exhaustive Analysis on Tax Planning within the Four Corners of the Law] based on the family settlement and arrangement. Included in the discussion are two similar judgments rendered by the ITAT Chennai wherein it has been held that family settlement/ arrangement can be extended to companies also
• [Pros & Cons of Exemption Claims made u/s 54, 54B and 54F] for the investment made in the name of relatives from funds emanating out of transfer of capital asset
• [Covering Taxability in Dissolution or Reconstitution of Firm] post-2021 amendments to section 45 and other related sections with well-laid examples. Included in the discussion is the important decision of the Hon’ble Supreme Court in the case of CIT v. Mansukh Dyeing and Printing Mills [2022] 145 taxmann.com 151 (SC)
• [Transfer of Capital Assets w.r.t. NRIs] It explains the procedure to be adopted in such cases with the help of case laws
• [Discussion on Various Provisions of RFCTLARR Act 2013] It also analyzes the various provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013
• [Taxability of Interest received on Compensation on Acquisition of Agricultural Land] has been discussed with the help of various judicial decisions

The structure of the book is as follows:

• [Exhaustive Coverage] This book contains 37 Chapters, and each Chapter covers one section/topic exclusively. All the sections of Chapter IV-E dealing with Capital Gains under the heading ‘Computation of Total Income’ has been covered comprehensively
• [Cross-Referenced Contents] Each Chapter in this book is unique, and whenever and wherever there are overlapping provisions, adequate care has been taken to give cross-references
• [Specific Focus on Tax Planning] The tax planning has to be legal, and this important and ethical aspect has been stressed throughout the book
• [Examples/Illustrations] covering every possible situation
• [Case Laws] Whenever and wherever there is no uniformity in the thinking of various judicial authorities, they have been brought out and highlighted. In appropriate cases, the later decisions have been explained in tune with the ratio decidendi of earlier decisions by highlighting the common issues between these decisions and/or bringing out the distinction between the earlier decision(s) and the later one(s)

The detailed contents of the book are as follows:

• Which income is taxable under the head capital gains?
• What is a capital asset?
• Types of capital assets – short-term capital assets and long-term capital assets
• What is a transfer?
• Which transfers do not give rise to taxable capital gains?
• Year of taxability of capital gains
• Taxation of unit-linked insurance policy
• Transactions between a firm and its partners or between an AOP/BOI and its members
• Computation of capital gains – short-term capital gains and long-term capital gains
• How to compute the full value of consideration?
• What is expenditure on the transfer of capital asset
• What is the cost of acquisition?
• What is the cost of improvement?
• What is the indexed cost of acquisition and indexed cost of improvement
• Rollover deduction in respect of profit on the sale of property used for residence [Section 54]
• Deduction of rollover of gain on transfer of land used for agricultural purposes [Section 54B]
• Rollover deduction in respect of capital gain on compulsory acquisition of lands and buildings [Section 54D]
• Rollover deduction in respect of investment of long-term capital gains from land or building or both in specified bonds [section 54EC]
• Should there be a taboo in investment in the name of relatives for Secs. 54, 54B and 54F exemptions?
• NRIs and taxation of their income – a brief note
• Capital gains are not to be charged on investment in units of a specified fund
• Deduction in respect of long-term capital gain invested in residential house [Section 54F]
• Tax incentives for transfer of assets on shifting of industrial undertakings from urban area/shifting of industrial undertaking from an urban area to any special economic zone (SEZ) [Section 54G/54GA]
• Tax exemption for capital gains from the sale of residential property if invested in the capital of a start-up company [Section 54GB]
• Power of CBDT to relax any requirement for claiming deductions
• Tax computation in respect of STCG
• Tax computation in case of long-term capital gains
•  Long-term capital gains tax on listed equity shares, units of equity-oriented mutual funds and units of business trusts
• Reference to the valuation officer
• Loss under the head capital gains
• Distribution of assets by companies in liquidation
• How to compute capital gains in case of buy-back of shares/specified securities
• Capital gain and depreciable assets
•  Slump sale [Section 50B]
• Capital gain on intangible assets
• Charitable trust and capital gains
•  Capital gain in real estate transactions