Skip to content

CS Executive · Tax Laws and Practice · Capital Gains

Under the Income-tax Act, 2025, which of the following amounts is NOT allowed as a deduction while computing income chargeable under the head "Capital gains"?

Securities transaction tax paid is not deductible in computing capital gains. The Act allows transfer expenses, cost of acquisition and cost of improvement, but specifically disallows STT and certain interest claimed elsewhere. Brokerage, acquisition cost and improvement cost remain permissible deductions.

  1. ASecurities transaction tax paid on the transferCorrect
  2. BBrokerage paid wholly and exclusively in connection with the transfer
  3. CCost of any improvement to the asset
  4. DCost of acquisition of the asset

Explanation

Section 72 allows deduction of expenditure wholly and exclusively connected with the transfer, cost of acquisition and cost of improvement. Section 72(3) expressly bars deduction of securities transaction tax, so it cannot be claimed. Brokerage is transfer expenditure and is allowed.

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.

Practise Capital GainsFree diagnostic mock

More Capital Gains questions