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Capital Gains |
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What are Capital Gains? Any profits
or gains arising from a transfer of a capital asset effected in the previous year,
subject to certain exception, are chargeable to income tax under the head Capital
Gains . Such profits or gains are deemed to be the income of the previous year in
which the transfer takes place.
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How many types of Capital Assets are there?
There are two types of Capital Assets. Short term Capital Assets and Long term Capital
Assets. A short term Capital Asset held by an assessee could not more than 36 months
immediately preceding the date of its transfer. A capital asset which is held by
an assessee for more than 36 months is Long term Capital Asset. However if financial
investments are concern Short term means less than or upto 365 days & Long term
is More than 365 days.
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Cost Index Table
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Financial Year
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Cost Inflation Index
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Financial Year
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Cost Inflation Index
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Financial Year
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Cost Inflation Index
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1981-82
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100
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1989-90
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172
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1997-98
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331
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1982-83
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109
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1990-91
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182
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1998-99
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351
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1983-84
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116
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1991-92
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199
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1999-2000
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389
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1984-85
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125
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1992-93
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223
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2000-01
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406
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1985-86
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133
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1993-94
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244
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2001-02
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426
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1986-87
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140
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1994-95
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259
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2002-03
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447
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1987-88
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150
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1995-96
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281
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2003-04
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463
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1988-89
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161
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1996-97
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305
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2004-05
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480
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2005-06
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497
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How to calculate capital Gains..
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Details
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Without Index benefit
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With index benefit
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Sales Proceeds (Feb 2000)
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10000
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10000
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Purchase cost (Feb 1985)
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1000
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1000
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Index cost
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Nil
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3112
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Purchase cost * index of year of Sale / Index of year of Purchase
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Net gains
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9000
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6888
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Long term gains tax
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@10% without index benefit
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900
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10% of (10000-1000)
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@20% with index benefit
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1377.60
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20% of 6888
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