InvestorQ : Can you explain Capital Asset classification with a live example?
Sam Eswaran made post

Can you explain Capital Asset classification with a live example?

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swati Bakhda answered.
2 years ago
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Let us take the example of Sharad who had purchased a residential property in January, 2018 in Chennai for a consideration of Rs. 84,00,000. He sold the house in April, 2018 for Rs. 90,00,000. Will it classify as a capital asset in case of Sharad?

This is a residential property which is owned by Sharad. In this case residential house is a capital asset for Sharad and, hence, the gain of Rs.6,00,000 arising on account of sale of residential house will be treated as capital gains and will be charged to tax under the head “Capital Gains”. Of course, this will be a short term capital gains as it is held for a period of less than 24 months. Normally, you rarely property in such a short period of time unless there is an absolute emergency!

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