Capital Gain

Welcome to Your Assessment Test

Topic: Capital Gain

This assessment has been designed to evaluate your understanding of the provisions relating to Capital Gains under the Income Tax Act, including computation of capital gains, classification of assets, exemptions, recent amendments, compliance requirements, and practical application of taxation knowledge for the Financial Year 2025–26 / Assessment Year 2026–27.

Please read each question carefully and select the most appropriate answer. The assessment aims to support continuous professional learning, accuracy in tax computations and compliance handling, and enhancement of overall subject competency.

We wish you all the best for your assessment.

Assessment Instructions

The assessment consists of 20 Multiple Choice Questions (MCQs).
Each question carries 1 mark.
Only one option is correct for each question.
There are no negative marks for incorrect answers.
Questions skipped or left unanswered will be considered as 0 marks.
Retakes are not permitted once the assessment has been submitted.
The total duration of the assessment is 15 minutes.
The timer will start automatically once you enter your Name and Email Address and click on “Start Test”.
Ensure you have a stable internet connection and complete the assessment within the allotted time.

Please attempt the assessment carefully and submit your responses before the timer ends.

Name

The maximum investment in specified bonds for claiming exemption on LTCG from land/building is:

Rs. 25 lakh

Rs. 1 crore

Rs. 50 lakh

No limit

Intra-day trading in shares (buying and selling on the same day without actual delivery) is treated as:

Long-term capital gains

Speculative business income

Short-term capital gains

Non-speculative business income

The portion of distribution attributable to accumulated profits of a liquidated company is treated in shareholder's hands as:

Exempt income

Capital gains

Deemed dividend - income from other sources

Long-term capital gains

Which of the following is NOT a capital asset?

Unlisted shares

Land used for business

Jewellery held for personal use

Rural agricultural land in India

If the new asset is transferred before the lock-in period the earlier exempted capital gains will be:

Reduced from the cost of the new asset for computing capital gains

Taxed as LTCG in the year of original transfer

Taxed as income from other sources

Permanently exempt

Exemption on LTCG from land or building on investment in specified bonds within 6 months is available to:

Only individuals

Only HUFs and companies

Only resident assessees

Any assessee

When a capital asset is converted to stock-in-trade capital gains are taxable in:

The year of acquisition of the original asset

The year the FMV is determined

The year of conversion

The year in which the stock-in-trade is sold or transferred

Deemed full value of consideration rules for land/building apply when:

The assessee sells rural agricultural land

The stamp duty value exceeds 110% of actual consideration received

The assessee transfers depreciable assets

The assessee transfers listed shares below market price

A dealer in real estate holds land as stock-in-trade. The same land for an investor would be:

Stock-in-trade for dealer - capital asset for investor

Capital asset for dealer - stock-in-trade for investor

Capital asset for both

Stock-in-trade for both

Exemption on LTCG from transfer of a residential house on reinvestment in another residential house is available to:

Individuals and HUFs only

Only Hindu Undivided Families

Only resident individuals

Any assessee including companies

An investor who buys shares and holds them for investment purposes - profit on sale is taxable as:

Capital gains

Exempt income

Speculative income

Business income

Gains from a specified mutual fund (debt-oriented equity 35% or less) acquired on or after 1.4.2023 are always treated as:

Short-term capital gains taxable at normal rates

Exempt from tax

Business income

Long-term capital gains

Full value of consideration means:

The amount actually received by the seller

The FMV of the asset on date of transfer

The consideration received or accruing as a result of transfer

The stamp duty value only

For long-term capital assets the cost of acquisition is replaced by:

Original cost

Indexed cost of acquisition using Cost Inflation Index

Written down value

Fair market value on date of transfer

For compulsory acquisition by government capital gains are chargeable in:

The year the assessee files a claim

The year of actual possession by government

The year of notification of acquisition

The year in which compensation is received

Gains from redemption of units of an equity-oriented mutual fund held for more than 12 months are treated as:

Short-term capital gains

Business income

Exempt income

Long-term capital gains

Exemption on transfer of urban agricultural land on reinvestment in new agricultural land is available to:

Only resident individuals

Only companies

Any assessee

Individuals and HUFs only

Handing over possession of immovable property in consideration of part-performance of a contract is:

A transfer

Not a transfer

A transfer only when conveyance deed is registered

A gift and not a transfer

If the stamp duty value does NOT exceed 110% of the actual sale consideration:

Actual sale consideration is accepted as the full value

Stamp duty value is used as full value of consideration

FMV as on date of transfer is used

The Assessing Officer must refer to a Valuation Officer

Capital gains arise on depreciable assets when:

The sale consideration exceeds the written down value of the block

The asset is held for more than 36 months

Any asset in the block is sold at any price

The asset is transferred to a subsidiary company

Welcome to Your Assessment Test

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