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

Which personal effects ARE considered capital assets?

Wearing apparel

Furniture held for personal use

Motor car for personal use

Jewellery paintings sculptures and works of art

Full value of consideration means:

The stamp duty value only

The amount actually received by the seller

The consideration received or accruing as a result of transfer

The FMV of the asset on date of transfer

Urban agricultural land within specified municipal limits is:

Not subject to any tax

Excluded from capital asset definition

Treated as agricultural income and exempt

A capital asset liable to capital gains tax

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

Invest in any bank fixed deposit

Get an automatic extension from the government

Deposit the unutilized amount in Capital Gains Account Scheme

Simply defer tax payment

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

Any assessee

Individuals and HUFs only

Only resident individuals

Only companies

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

Fair market value at time of generation

Nil

Cost of brand building expenses

As certified by a chartered accountant

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

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

A dealer in real estate holds land as stock-in-trade. The same land for an investor would be:

Capital asset for dealer - stock-in-trade for investor

Stock-in-trade for both

Capital asset for both

Stock-in-trade for dealer - capital asset for investor

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

Written down value

Indexed cost of acquisition using Cost Inflation Index

Fair market value on date of transfer

Original cost

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

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

Its not a Capital Asset Since its value Exceeds 5 lakhs

Its a Capital Asset if its a Luxury Car

Its a Capital Asset if its insured

Its a Capital Asset since its a Property of any kind

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 stamp duty value of the asset

The original cost of acquisition

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

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

Exempt income

Speculative income

Business income

Capital gains

Redemption of Sovereign Gold Bonds by an individual is:

Treated as business income

Exempt under a capital gains exemption

Not regarded as a transfer

A taxable transfer

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

Short-term capital gains

Exempt income

Business income

Long-term capital gains

Capital gains are chargeable as income of:

The year in which the asset was acquired

The year in which the transfer took place

The year in which the sale agreement was made

The year in which sale consideration was received

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 written down value of the 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

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

The year of acquisition of the original asset

The year of conversion

The year the FMV is determined

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

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

Conversion of a capital asset into stock-in-trade

Distribution of assets by company to shareholders on liquidation

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

HUF partition distributing capital assets

Welcome to Your Assessment Test

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