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

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

Stock-in-trade for both

Capital asset for both

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 income from other sources

Taxed as LTCG in the year of original transfer

Permanently exempt

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

Only individuals

Any assessee

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

Long-term capital gains only

Any income except salary, subject to provisions of the Act

Urban agricultural land within specified municipal limits is:

Not subject to any tax

Treated as agricultural income and exempt

Excluded from capital asset definition

A capital asset liable to capital gains tax

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

Non-speculative business income

Short-term capital gains

Long-term capital gains

Speculative business income

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

36 months

24 months

12 months

48 months

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

Speculative income

Capital gains

Exempt income

Business income

Which personal effects ARE considered capital assets?

Motor car for personal use

Wearing apparel

Furniture held for personal use

Jewellery paintings sculptures and works of art

Which of the following is NOT regarded as a transfer?

Sale of shares on a stock exchange

Gift of a capital asset (other than ESOP shares)

Compulsory acquisition by government

Conversion of capital asset to stock-in-trade

Capital gains are chargeable as income of:

The year in which sale consideration was received

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

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 bonus shares allotted on or after 1.4.2001 is:

FMV on date of allotment

FMV as on 1.4.2001

Original share's cost proportionately divided

Nil

Which of the following transactions may give rise to capital gains taxation?

Conversion of stock-in-trade into a capital asset

Transfer of a capital asset by way of sale

Holding of a capital asset without any change in ownership

Purchase of a residential house

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

HUF partition distributing capital assets

Distribution of assets by company to shareholders on liquidation

Conversion of a capital asset into stock-in-trade

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

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

Long-term if held over 12 months

Long-term capital assets regardless of holding

Short-term capital assets regardless of holding

Long-term if held over 36 months

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

Long-term capital gains

Long or short-term depending on holding period

Short-term capital gains

Exempt from capital gains tax

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

Fair market value at time of generation

As certified by a chartered accountant

Nil

Cost of brand building expenses

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

The original cost of asset

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 written down value of the asset

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

Only Hindu Undivided Families

Only resident individuals

Individuals and HUFs only

Any assessee including companies