As per the Income-tax Law, gain arising on transfer of capital asset is charged to tax under the head “Capital gains”. What constitutes ‘transfer’ as per Income-tax Law?
Generally, transfer means sale, however, for the purpose of Income-tax Law "Transfer”, in relation to a capital asset, includes:
i. Sale, exchange or relinquishment of the asset;
ii. Extinguishment of any rights in relation to a capital asset;
iii. Compulsory acquisition of an asset;
iv. Conversion of capital asset into stock-in-trade;
v. Maturity or redemption of a zero coupon bond;
vi. Allowing possession of immovable properties to the buyer in part performance of the contract;
vii. Any transaction which has the effect of transferring an (or enabling the enjoyment of) immovable property; or
viii. Disposing of or parting with an asset or any interest therein or creating any interest in any asset in any manner whatsoever.