CA Intermediate · Taxation · Capital Gains
Which of the following transactions is not regarded as a transfer of a capital asset for the purposes of capital gains?
A gift of jewellery by a father to his son under a gift deed is not a transfer for capital gains. The law specifically excludes gifts. Sales, exchanges and relinquishment of rights are all transfers, even between relatives.
- ASale of a plot of land by Rohan to his brother at an agreed price
- BExchange of one piece of land for another piece of land
- CRelinquishment of a right in a capital asset in return for consideration
- DGift of jewellery by a father to his son under a registered gift deedCorrect
Explanation
A gift of a capital asset is specifically excluded from transfer, so no capital gain arises for the donor. Sale, exchange and relinquishment of rights all fall within the meaning of transfer, even when done between relatives.
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