Capital Gains Assesment

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

Cost of acquisition of bonus shares allotted on or after 1.4.2001 is:

Nil

FMV on date of allotment

FMV as on 1.4.2001

Original share's cost proportionately divided

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

Only FMV as on 1.4.2001

The lower of actual cost or FMV as on 1.4.2001

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

Original purchase price only

A person owns a car for personal use, which statement is true ?

Its a Capital Asset since its a Property of any kind

Its not a Capital Asset Since its value Exceeds 5 lakhs

Its a Capital Asset if its insured

Its a Capital Asset if its a Luxury Car

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 or its nominee holds the whole of the shares

Parent holds at least 51% of shares

The asset transferred is stock-in-trade

Capital gains are chargeable as income of:

The year in which the sale agreement was made

The year in which the transfer took place

The year in which the asset was acquired

The year in which sale consideration was received

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

Only resident assessees

Only HUFs and companies

Any assessee

Only individuals

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

Nil

As certified by a chartered accountant

Cost of brand building expenses

Fair market value at time of generation

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

Short-term capital gains

Long-term capital gains

Speculative business income

Non-speculative business income

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

FMV as on date of transfer is used

The Assessing Officer must refer to a Valuation Officer

Stamp duty value is used as full value of consideration

Actual sale consideration is accepted as the full value

10.

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

Speculative business income

Exempt income

Capital gains

Business income (non-speculative)

1 out of 2

11.

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 36 months

Long-term capital gains, as the land is held for more than 12 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 24 months

12.

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

No limit

Rs. 1 crore

Rs. 25 lakh

Rs. 50 lakh

13.

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

Written down value

Fair market value on date of transfer

Original cost

Indexed cost of acquisition using Cost Inflation Index

14.

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

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

HUF partition distributing capital assets

Conversion of a capital asset into stock-in-trade

Distribution of assets by company to shareholders on liquidation

15.

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

The stamp duty value exceeds 110% of actual consideration received

The assessee transfers depreciable assets

The assessee transfers listed shares below market price

The assessee sells rural agricultural land

16.

Which of the following is NOT regarded as a transfer?

Conversion of capital asset to stock-in-trade

Compulsory acquisition by government

Gift of a capital asset (other than ESOP shares)

Sale of shares on a stock exchange

17.

Urban agricultural land within specified municipal limits is:

A capital asset liable to capital gains tax

Not subject to any tax

Excluded from capital asset definition

Treated as agricultural income and exempt

18.

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

Any assessee

Only companies

Individuals and HUFs only

Only resident individuals

19.

Full value of consideration means:

The consideration received or accruing as a result of transfer

The amount actually received by the seller

The stamp duty value only

The FMV of the asset on date of transfer

20.

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 stamp duty value of the asset

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

2 out of 2