Under which of the following circumstances may ‘capital gains arise?

  1. When there is an increase in the sales of a product
  2. When there is a natural increase in the value of the property owned
  3. When you purchase a painting and there is a growth in its value due to increase in its popularity

Select the correct answer using the codes given below:

[UPSC Civil Services Exam – 2012 Prelims]

(a) 1 only

(b) 2 and 3 only

(c) 2 only

(d) 1, 2 and 3


Answer: (b)        

Explanation:

  • Any profit or gain that arises from the sale of a ‘capital asset’ is a capital gain.
  • Capital gains tax is a tax imposed on gains derived from the disposition of capital assets.
  • This gain or profit is charged to tax in the year in which the transfer of the capital asset takes place.
  • ‘Capital Gains’ arise when,
    • When there is a natural increase in the value of the property.
    • When you purchase a painting and there is a growth in its value due to an increase in its popularity.
  • Hence statement 2 and 3 are correct.

Consider the following statements:                                                                   The Parliament of India can place a particular law in the Ninth Schedule of the Constitution of India. The validity of a law placed in the Ninth Schedule cannot be examined by any court and no judgement can be made on it. Which of the statements given above is/are correct?

Consider the following statements:                                               

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Consider the following statements:                                                         The Parliament of India can place a particular law in the Ninth Schedule of the Constitution of India. The validity of a law placed in the Ninth Schedule cannot be examined by any court and no judgement can be made on it. Which of the statements given above is/are correct?

Consider the following statements:                                               

Read More »
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