CS Executive · Tax Laws and Practice · Capital Gains
Ms. Kavya Rao is a non-resident Indian. She earned a long-term capital gain of ₹6,00,000 on transferring a foreign exchange asset. The net consideration was ₹20,00,000. Within six months she invested ₹10,00,000 in a specified asset. Under section 215 of the Income-tax Act, 2025, what portion of the gain is not charged under section 67?
₹3,00,000 is not charged. Since the investment of ₹10,00,000 is less than the net consideration of ₹20,00,000, the exemption is proportionate: gain of ₹6,00,000 multiplied by 10,00,000 over 20,00,000 gives ₹3,00,000.
- A₹3,00,000Correct
- B₹6,00,000
- C₹1,20,000
- D₹10,00,000
Explanation
The cost of the new asset is less than the net consideration, so the formula A = B × C/D applies. A = 6,00,000 × 10,00,000/20,00,000 = ₹3,00,000. The full ₹6,00,000 would be exempt only if the new asset cost were not less than the net consideration.
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, Aarav Traders Ltd transfers an undertaking by way of slump sale after owning and holding it for 30 months im…
- Meera has long-term capital gains of Rs 40 lakh from transferring a building. Within six months she invests Rs 30 lakh in eligible REC bonds…
- Under section 198 of the Income-tax Act, 2025, a mutual fund scheme that invests through another fund traded on a recognised stock exchange …
- Under the Income-tax Act, 2025, an assessee earns capital gains on transfer of land used for an industrial undertaking in an urban area, in …
- Under the Income-tax Act, 2025 (applicable from the June 2027 session), a Hindu undivided family transfers land that its karta used for agri…
- Under the Income-tax Act, 2025, in computing the net worth of an undertaking transferred by slump sale, what is the value of goodwill of the…