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

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

Only Hindu Undivided Families

Individuals and HUFs only

Any assessee including companies

Only resident individuals

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

The year of conversion

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

The year of acquisition of the original asset

The year the FMV is determined

Which of the following is NOT considered a capital asset?

Rural agricultural land in India inherited from his father

Gold ornaments inherited from ancestors

A commercial property held for earning rental income

Paintings kept as a personal collection

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

Short-term capital gains

Exempt from capital gains tax

Long-term capital gains

Long or short-term depending on holding period

For bonus shares allotted on or after 1.4.2001 the period of holding is reckoned from:

Date of allotment of bonus shares

Date of transfer of bonus shares

1st April of the year of allotment

Date original shares were purchased

Full value of consideration means:

The FMV of the asset on date of transfer

The stamp duty value only

The amount actually received by the seller

The consideration received or accruing as a result of transfer

Which of the following is NOT regarded as a transfer?

Compulsory acquisition by government

Gift of a capital asset (other than ESOP shares)

Conversion of capital asset to stock-in-trade

Sale of shares on a stock exchange

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

Business income

Exempt income

Long-term capital gains

Short-term capital gains

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

The stamp duty value exceeds 110% of actual consideration received

The assessee transfers listed shares below market price

The assessee sells rural agricultural land

The assessee transfers depreciable assets

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

Urban agricultural land within specified municipal limits is:

A capital asset liable to capital gains tax

Excluded from capital asset definition

Not subject to any tax

Treated as agricultural income and exempt

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

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

Stamp duty value is used as full value of consideration

Actual sale consideration is accepted as the full value

FMV as on date of transfer is used

The Assessing Officer must refer to a Valuation Officer

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

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

Rs. 1 crore

Rs. 25 lakh

Rs. 50 lakh

No limit

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

12 months

48 months

36 months

24 months

Capital gains arise on depreciable assets when:

The asset is transferred to a subsidiary company

The asset is held for more than 36 months

The sale consideration exceeds the written down value of the block

Any asset in the block is sold at any price

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

Simply defer tax payment

Deposit the unutilized amount in Capital Gains Account Scheme

Get an automatic extension from the government

Invest in any bank fixed deposit

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

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 36 months

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

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

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

On the date the buyer applies for mutation of records

On the date the full sale consideration is received

On the date the sale agreement is signed