Capital Gains

Transfer of Capital Asset

The term transfer has been defined under section 2(47) of the Income Tax Act in an inclusive fashion. As per this 'transfer' in relation to a capital asset includes the following:-

1. the sale , exchange or relinquishment of the asset, or
2. the extinguishment of any rights in the capital asset, or
3. the compulsory acquisition of the capital asset or rights therein under any law, or
4. where any capital asset is converted by the owner into or is treated by him as stock in trade of his business, the conversion or such treatment is also covered under the term transfer and capital gains is to be calculated, or
5. where in respect of an immovable property , the possession of the same is allowed to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 the transaction is treated as transfer of the immovable property, or
6. Any transaction which allows or enables the assessee by becoming a member of or acquiring shares in a cooperative society or company or association of persons or by way of any agreement or arrangement or in any other manner whatsoever which has the effect of transferring or enabling the enjoyment of any immovable property.

For the purposes of items at (v) & (vi) above the term immovable property includes machinery, plant, furniture, fittings or other things if these are transferred together with any land or any building or any part of a building or any rights therein.