CG

Welcome to Your Assessment Test

Topic: CG

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

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

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

Long-term if held over 36 months

Long-term capital assets regardless of holding

Long-term if held over 12 months

Short-term capital assets regardless of holding

Capital gains are chargeable as income of:

The year in which the transfer took place

The year in which the sale agreement was made

The year in which the asset was acquired

The year in which sale consideration was received

Listed equity shares become long-term capital assets if held for more than:

36 months

12 months

48 months

24 months

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

As certified by a chartered accountant

Nil

Fair market value at time of generation

Cost of brand building expenses

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

Stamp duty value is used as full value of consideration

The Assessing Officer must refer to a Valuation Officer

Actual sale consideration is accepted as the full value

FMV as on date of transfer is used

Which personal effects ARE considered capital assets?

Wearing apparel

Motor car for personal use

Jewellery paintings sculptures and works of art

Furniture held for personal use

When a capital asset is converted into stock-in-trade, the full value of consideration for computing capital gains is:

The original cost of acquisition

The actual sale price when the stock is eventually sold

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

The stamp duty value of the asset

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

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 24 months

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

If an assessee cannot invest capital gains before the due date of filing the return they can:

Simply defer tax payment

Invest in any bank fixed deposit

Deposit the unutilized amount in Capital Gains Account Scheme

Get an automatic extension from the government

A person who regularly trades in Futures and Options (F&O) - the income from F&O is taxable as:

Business income (non-speculative)

Speculative business income

Exempt income

Capital gains

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

Not a transfer

A gift and not a transfer

A transfer only when conveyance deed is registered

A transfer

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

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

On the date the sale agreement is signed

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

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

Capital gains arise on depreciable assets when:

The asset is transferred to a subsidiary company

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

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

Long-term capital gains

Business income

Exempt income

Short-term capital gains

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

The subsidiary is a foreign company

Parent holds at least 51% of shares

Parent or its nominee holds the whole of the shares

The asset transferred is stock-in-trade

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

The assessee transfers depreciable assets

The stamp duty value exceeds 110% of actual consideration received

The assessee transfers listed shares below market price

The assessee sells rural agricultural land

Which of the following is NOT regarded as a transfer?

Sale of shares on a stock exchange

Conversion of capital asset to stock-in-trade

Gift of a capital asset (other than ESOP shares)

Compulsory acquisition by government

Welcome to Your Assessment Test

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