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

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

36 months

24 months

12 months

48 months

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

12 months

24 months

36 months

48 months

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

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

Parent holds at least 51% of shares

The asset transferred is stock-in-trade

Parent or its nominee holds the whole of the shares

The subsidiary is a foreign company

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

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

HUF partition distributing capital assets

Capital gains are chargeable as income of:

The year in which the asset was acquired

The year in which the sale agreement was made

The year in which the transfer took place

The year in which sale consideration was received

Urban agricultural land within specified municipal limits is:

Excluded from capital asset definition

Not subject to any tax

A capital asset liable to capital gains tax

Treated as agricultural income and exempt

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

Rs. 25 lakh

Rs. 1 crore

No limit

Rs. 50 lakh

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

The assessee transfers listed shares below market price

The assessee transfers depreciable assets

The stamp duty value exceeds 110% of actual consideration received

The assessee sells rural agricultural land

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

Nil

FMV on date of allotment

Original share's cost proportionately divided

FMV as on 1.4.2001

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

Only resident individuals

Only Hindu Undivided Families

Individuals and HUFs only

Any assessee including companies

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

Short-term capital assets regardless of holding

Long-term if held over 12 months

Long-term if held over 36 months

Long-term capital assets regardless of holding

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

The actual sale price when the stock is eventually sold

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

The original cost of acquisition

The stamp duty value of the asset

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

Individuals and HUFs only

Only companies

Only resident individuals

Any assessee

Redemption of Sovereign Gold Bonds by an individual is:

Exempt under a capital gains exemption

Not regarded as a transfer

Treated as business income

A taxable transfer

Full value of consideration means:

The stamp duty value only

The consideration received or accruing as a result of transfer

The amount actually received by the seller

The FMV of the asset on date of transfer

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 only when conveyance deed is registered

A transfer

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

Date of transfer of bonus shares

1st April of the year of allotment

Date original shares were purchased

Date of allotment of bonus shares

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

Purchase of a residential house

Conversion of stock-in-trade into a capital asset

Holding of a capital asset without any change in ownership

Transfer of a capital asset by way of sale

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

Any assessee

Only HUFs and companies

Only individuals

Only resident assessees

Welcome to Your Assessment Test

Leave a Reply Cancel reply