Computation of Capital Gain for Short-Term Capital Assets?

Short-Term Capital Assets - [Section 48]

Full value of consideration

Less: Cost of acquisition of asset

Less: Cost of improvement

Less: Expenditure incurred wholly and exclusively in connection with such transfer

Computation of Capital Gain for Long-Term Capital Assets:

Long-Term Capital Assets - [Section 48]

Full value of consideration

Less: Indexed Cost of acquisition

Less: Indexed Cost of Improvement

Less: Expenditure incurred wholly and exclusively in connection with such transfer

What are the Expenses that can be deducted from Full Value for Consideration?

Expenses from sale proceeds from a capital asset, that wholly and directly relate to the sale or transfer of the capital asset are allowed to be deducted.

These are the expenses which are necessary for the transfer to take place

In the case of sale of house property, these expenses are deductible from the total sale price:

a. Brokerage or commission paid for securing a purchaser

b. Cost of stamp papers

c. Travelling expenses and legal expenses in connection with transfer - these may be incurred after the transfer has been affected.

In case an asset is acquired by gift, will, succession or inheritance, the period this asset was held by the previous owner is also included when determining whether it's a short term or a long-term capital asset.

Where property has been inherited, expenditure incurred with respect to procedures associated with the will and inheritance, obtaining succession certificate, costs of the executor, may also be allowed in some cases.