CAPITAL GAIN TAX

Some Important Notes

1. Private residence or Land and Building

A private residence with an ownership less than 10 years or residing less than 10
years disposed to any person ( except by way of transfer within 3 generation) at
more than 30 lakh attracts the capital gain tax as follows:
5% -------- ownership less than 5 years
2.5% -------- ownership more than 5 years or 5 years.

2. Shares & Debentures

a. Gain from sale of shares or debentures if listed in stock exchange, 5% tax rate is
applicable.
b. If not listed in stock exchange, 10% tax rate is applicable.

3. Non Taxable
a. Private residence owned by a natural person continuously for 10 years or more
and lived in continuously or intermittently for a total of 10 years or more.
b. Private residence with an onwnership less than 10 years disposed to any person
at less than 30 lakh.
c. Sale and transfer within 3 generation.
d. Gold , Silver and other valueable stones.

Computation of Gain or loss from non-business chargeable assets for the

current income yare
Particulars
Incomings from the disposal of shares & debentures
Less: Outgoings for the disposal
(A) Gain or loss from disposal of shares or debentures
Incomings from the disposal of building or land
Less: Outgoing for the disposals
(B) Gain or loss from disposal of building or land
(A+B) Gain or loss
Less: Unrelieved losses
Net gain or loss

Rs.
xxxx
(xxx)
xxxx
xxxx
(xxx)
xxx
xxxx
(xxx)
xxx

Exercise
1. Mrs. Radhika sold a house built before a year at Rs. 1,50,00,000. Similarly, she sold a plot of land at Rs.
1,20,00,000. The cost (outgoing) of the sold house and the plot of lan are Rs. 1,22,00,000 and Rs. 1,10,00,000
respectively excluding Rs. 20,000 as the cost of registration of land while purchasing in last year. In addition, she
also disposed the sahres of Investment bank Ltd at Rs. 2,30,000 that was purchsed at Rs. 2,55,000 including all
costs. Compute the net capital gain for the year as per income tax act 2058.
2. Mrs. Khanal sold a house built before a year at Rs. 2,40,00,000. Similarly, she sold a plot of land at Rs.
1,60,00,000. The cost (outgoing) of the sold house and the plot of lan are Rs. 2,12,00,000 and Rs. 1,45,00,000
respectively excluding Rs. 20,000 as the cost of registration of land while purchasing in last year. In addition, she
also disposed the sahres of Investment bank Ltd at Rs. 2,50,000 that was purchsed at Rs. 2,75,000 including all
costs. Compute the net capital gain for the year as per income tax act 2058.
3. Mr. Pradhan has been conducting investment. He has furnished the following information for the income year. He
has no other income.
a. Incomings and outgoings with respect to sale of building located at Gaushala that was sold to Gopal & Co.
Outgoings:
Purchase of Land in Baisakh 2064
Construction of Compound wall
Interest Payment
Construction of building (2065)
Fine Paid to government
Commission to broker

Rs 48,00,000
Rs 5,40,000
Rs. 6,10,000
Rs. 60,00,000
Rs. 25,000
Rs. 2,10,000

Incomings
Sale Proceeds of Building
Market value of the building

Rs. 1,30,00,000
Rs. 1,30,00,000

b. Incomings and outgoings with respect to sale of building located at New Road.
Outgoings:
Purchase of Land in 2065
Construction of building (2065)

Rs. 41,00,000
Rs. 60,50,000
Incomings

Sale porceeds of the building

Market value of the building

Rs. 1,07,00,000
Rs. 1,07,00,000

Additional Informatio:
a. Carried forward of unrelieved business loss that was incurred in the previous financial year Rs. 14,000.
b. Carried forward of unrelieved loss that was incurred in the previous fiscal year on disposal of non business
chargeable assets Rs. 25,000.
Required : a. Net gains from non - business chargeable assets b. Tax liability

4. Mr. Pradhan has been conducting investment. He has furnished the following information for the income year. He
has no other income.
a. Incomings and outgoings with respect to sale of building located at Gaushala that was sold to Gopal & Co.
Outgoings:
Purchase of Land in Baisakh 2064
Construction of Compound wall
Interest Payment
Construction of building (2065)
Fine Paid to government
Commission to broker

Rs 47,50,000
Rs 5,40,000
Rs. 7,10,000
Rs. 61,00,000
Rs. 25,000
Rs. 2,05,000

Incomings
Sale Proceeds of Building
Market value of the building

Rs. 1,32,00,000
Rs. 1,32,00,000

b. Incomings and outgoings with respect to sale of building located at New Road.
Outgoings:
Purchase of Land in 2065
Construction of building (2065)

Rs. 42,50,000
Rs. 61,50,000
Incomings

Sale porceeds of the building

Market value of the building
Additional Information:

Rs. 1,10,00,000
Rs. 1,10,00,000

a. Carried forward of unrelieved business loss that was incurred in the previous financial year Rs. 18,000.
b. Carried forward of unrelieved loss that was incurred in the previous fiscal year on disposal of non business
chargeable assets Rs. 35,000.
Required : a. Net gains from non - business chargeable assets b. Tax liability
5. Mr. Rai purchased a residential house on 1st Ashwin 2069 at Rs. 89,00,000 with all expenses of registration. He
sold the house at Rs. 1,12,50,000 on 1st Kartik, 2071.
Required: Capital Gain and tax liability of Mr. Rai.
6. Mr. Ram Prasad purchased a land costing Rs. 50,00,000 and paid registration charge Rs. 1,00,000. He also paid
another amount Rs. 1,50,000 as brokerage charge to borker for purchase. He has constructed a building at a cost of
Rs. 78,50,000. After two years of completed the house he sold the house at Rs. 1,70,00,000. He paid commission for
sale of building 3% of sales value. In the process of construction of building he had been vioalating the rule of
municipality, so he had paid penalty to municipality Rs. 60,000.
Required: Net gain from the disposal of building and tax liability.
7. Mr. Ajay provided the following information regarding his business assets and other relevant information.
Machinery purchased

Rs. 3,00,000 annd disposed at Rs. 8,80,000.

Loss on sold of machinery on last year Rs. 45,000.

Normal business loss uncoverd previously Rs. 60,000.

Loss from investment in previous income year Rs. 25,000.
Required: a) Capital Gain b) Amount of tax payable
8. You are given the following information of Mr. Sharma regarding his business and investment.
He purchased shares of Nepal Standard Chartered Bank at Rs. 4,00,000 four years ago. In previous income
year, he sold all these shares at Rs. 9,30,000. He claimed for deduction following losses:
Nomrmal business loss in previous year Rs. 55,000.
Unrelieved investment loss of previous year Rs. 72,000.
Unrelieved business loss previous year Rs. 33,000.
Loss on sale of share of Oriental Hotel Rs. 10,000.
Loss on sale of share in India

Rs. 7,000.

Required: a) Net gain to be included in income from investment

b) Total Tax Liability