Under section 67(1) of the Income-tax Act, 2025, capital gains on the sale of a capital asset are ordinarily deemed to be income of which tax year?
Question and options
Under section 67(1) of the Income-tax Act, 2025, capital gains on the sale of a capital asset are ordinarily deemed to be income of which tax year?
The tax year in which the gain is reinvested
The tax year in which the asset was acquired
The tax year in which the full price is received
The tax year in which the asset was transferred
Answer and explanation
Section 67(1) of the Income-tax Act, 2025 charges capital gains as income of the tax year in which the transfer took place, whenever the consideration is actually received. The year of acquisition matters only for the holding period and cost, and reinvestment may give an exemption but does not shift the year of charge.
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