CS Executive · Tax Laws and Practice · Capital Gains
An NRI transfers a foreign exchange asset, earning long-term capital gain of Rs 8,00,000 on net consideration of Rs 40,00,000. Within six months he invests Rs 30,00,000 in a specified asset. Under section 215 of the Income-tax Act, 2025, what gain is not charged to tax?
Rs 6,00,000 is not charged. Since the investment of Rs 30,00,000 is less than the net consideration of Rs 40,00,000, the gain not charged is the whole gain of Rs 8,00,000 multiplied by 30/40.
- ARs 8,00,000
- BRs 6,00,000Correct
- CRs 2,00,000
- DRs 10,00,000
Explanation
The cost of the new asset is less than net consideration, so the formula applies: 8,00,000 x 30,00,000/40,00,000 = Rs 6,00,000. Rs 2,00,000 is the taxable balance, not the amount left uncharged.
Did you get it right without looking?
One question tells you little. A timed set on Capital Gains shows your real accuracy, how long you take and where you lose marks.
More Capital Gains questions
- Under the Income-tax Act, 2025, Rao Ltd has a block of depreciable assets with opening written down value Rs 12 lakh. During the year it acq…
- Which bond qualifies as a 'long-term specified asset' under Section 85 of the Income-tax Act, 2025?
- Under the Income-tax Act, 2025 (applicable from the June 2027 session), a Hindu undivided family transfers land that its karta used for agri…
- Mehta Traders transfers an undertaking by slump sale after owning it for 30 months. Under the Income-tax Act, 2025, how is the profit from t…
- Under section 83 of the Income-tax Act, 2025, an individual does not utilise the capital gain on agricultural land to buy new land before fi…
- In a slump sale of a division by Bharat Engineering Ltd, the books show the following assets: land and stock at book value Rs 40 lakh, depre…