Capital Gains-Basic

Welcome to Your Assessment Test

Topic: Capital Gains-Basic

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

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

Actual sale consideration is accepted as the full value

The Assessing Officer must refer to a Valuation Officer

Stamp duty value is used as full value of consideration

FMV as on date of transfer is used

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

Non-speculative business income

Speculative business income

Long-term capital gains

Short-term capital gains

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

Short-term capital gains

Long-term capital gains

Exempt income

Business income

Rajesh bought a plot of land on 1st January 2022 and sold it on 1st February 2024. How will the capital gains be classified?

Short-term capital gains, as the land is held for less than 24 months

Long-term capital gains, as the land is held for more than 24 months

Short-term capital gains, as the land is held for less than 36 months

Long-term capital gains, as the land is held for more than 12 months

For compulsory acquisition by government capital gains are chargeable in:

The year the assessee files a claim

The year of notification of acquisition

The year in which compensation is received

The year of actual possession by government

Capital gains on depreciable assets forming part of a block of assets are always treated as:

Long-term capital gains

Short-term capital gains

Long or short-term depending on holding period

Exempt from capital gains tax

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

A gift and not a transfer

Not a transfer

A transfer

A transfer only when conveyance deed is registered

Which of the following is NOT considered a capital asset?

Rural agricultural land in India inherited from his father

Paintings kept as a personal collection

A commercial property held for earning rental income

Gold ornaments inherited from ancestors

Unlisted shares and immovable property become long-term capital assets if held for more than:

36 months

48 months

12 months

24 months

Market linked debentures and units of a specified mutual fund are always treated as:

Long-term if held over 12 months

Short-term capital assets regardless of holding

Long-term capital assets regardless of holding

Long-term if held over 36 months

For a capital asset acquired before 1.4.2001 the cost of acquisition is taken as:

The higher of actual cost or FMV as on 1.4.2001 (at assessee's option)

Original purchase price only

The lower of actual cost or FMV as on 1.4.2001

Only FMV as on 1.4.2001

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

Cost of acquisition of self-generated goodwill of a business is:

Fair market value at time of generation

Nil

As certified by a chartered accountant

Cost of brand building expenses

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

Individuals and HUFs only

Any assessee

Only companies

Only resident individuals

When is transfer of an immovable property considered to have taken effect for capital gains purposes?

On the date the sale agreement is signed

On the date the buyer applies for mutation of records

On the date the full sale consideration is received

On the date possession is handed over or the conveyance deed is registered, whichever is earlier

When a capital asset is destroyed due to flood and the owner receives insurance money, the full value of consideration is taken as:

The fair market value of the asset on the date of destruction

The money received or fair market value of assets received from the insurer on the date of receipt

The original cost of asset

The written down value of the asset

Which of the following IS considered a transfer for capital gains purposes?

Distribution of assets by company to shareholders on liquidation

HUF partition distributing capital assets

Conversion of a capital asset into stock-in-trade

Transfer of asset by holding company to its 100% Indian subsidiary

A taxpayer incurs a loss of ₹5 lakh from F&O trading and earns a long-term capital gain of ₹8 lakh from listed equity shares. The F&O loss can be adjusted against:

No other income

Only capital gains

Any income except salary, subject to provisions of the Act

Long-term capital gains only

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

Rs. 25 lakh

Rs. 50 lakh

Rs. 1 crore

No limit

Transfer of a capital asset by a company to its wholly-owned Indian subsidiary is not a transfer if:

The asset transferred is stock-in-trade

Parent holds at least 51% of shares

Parent or its nominee holds the whole of the shares

The subsidiary is a foreign company

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