Free Essay

Capital Gains Introduction

In: Business and Management

Submitted By bhav17
Words 2334
Pages 10
(Div B, Subdiv c , S38-55)

Prior to 1972 capital gains were not taxed in Canada and capital losses could not be claimed.
The portion (inclusion rate) of a capital gain or loss which is taxable/deductible has changed since then. [calendar 1972 to 1987 => 50%; calendar 1988 to 1989 => 66.67%; calendar 1990 to Feb 27, 2000 => 75%; Feb 28 to Oct 17, 2000 => 66.67%; Oct 18, 2000 to present => 50%]

Since 1972, each disposition of capital property requires a separate calculation of taxable capital gain or allowable capital loss. Section 3(b) requires that allowable capital losses be offset against taxable capital gains, except as discussed below for PUP (including LPP) and ABILs. If the net result of all current year capital dispositions is a taxable capital gain, this amount is included in Division B income. If the net result is an allowable capital loss, this amount is not deductible currently since allowable capital losses can ONLY BE DEDUCTED AGAINST taxable capital gains. (A net allowable capital loss for the current year can be carried over to other years under Division C, as will be discussed in chapter 10.)

Allowable Business Investment Losses are effectively allowable capital losses, resulting from the disposition of shares or debt of Small Business Corporations (CCPCs carrying on Active Business), which are deductible against any type of income. (ie not restricted to capital gains.) As such they are identified and segregated from the net taxable capital gain/loss computation for the year, and dealt with separately. This is effectively a tax incentive to motivate investors to invest in Canadian small businesses.

If an individual has previously claimed a capital gains deduction (anytime since 1985), any subsequent BIL is reduced (disallowed) by an amount equal to the capital gains previously sheltered by such deductions. This “disallowed” BIL is converted to a capital loss, and as such can only be deducted against capital gains. See page 318 in text. (The finance department feels that allowing individuals to offset taxable capital gains with the capital gains deduction, while also allowing other income to be offset by ABILs is “double dipping” and too generous! Similar restrictions are placed on claims for capital gains deductions where previous ABIL claims have sheltered other income sources from taxation.)

The general capital gains deduction allowing resident individuals (not corporations) to earn in their lifetime $100,000 of capital gains tax free, existed between 1985 and 1994. The deduction was claimable only in the year of a capital disposition which gave rise to a capital gain. In 1994 a final election to use any unused portion of the lifetime limit against unrealized gains which could be supported by FMV appraisals was allowed. The benefit of the election was to increase the ACB of capital assets which had increased in value but had not yet been subjected to a disposition. This election may still be relevant in tax preparation today, where a taxpayer disposes of property (say real estate) which was acquired prior to 1994 and on which an election had been made.

A further capital gains deduction allowing resident individuals to earn in their lifetime $800,000 (less any prior claims made under the general deduction above) of capitals gains tax free on the sale of qualified Small Business Corporation shares and qualified farming & fishing properties only, still exists today.

This deduction again represents a tax incentive to motivate investors to invest in Canadian small business and to assist farming & fishing operations.

Recall from chapter 1 and the history above, that capital gains have always received favourable tax treatment. Therefore, the issue of whether or not a specific gain is on account of capital or some other form of income, is implicit in all dispositions. Review the concepts of PRIMARY INTENTION and SECONDARY INTENTION, including the various criteria used to establish INTENTION which were first introduced in chapter 4 and are discussed again in this chapter.
Note that a special election is available under S39 to individuals only, with respect to the disposition of “Canadian Securities”, to have all such transactions treated as capital in nature.
It should be obvious that taxpayers prefer capital gains treatment to income treatment on profits, but would prefer income treatment (100% deductible against any income) over capital gains treatment in the case of losses! IT-459, IT-218R, IT-479R are useful resources on this topic.

Capital property includes any depreciable property, and any other property that would result in a capital gain or loss on disposition (based on the common-law principles above.)

Rules related to the computation of net taxable capital gains refer to 3 classifcations of properties: Personal Use Property (property acquired for personal use and enjoyment of the taxpayer), Listed Personal Property (specific collectibles not expected to depreciate represent a specific subset of PUP) and Other Capital Property (the default classification which includes capital property acquired to generate income from business or property)

Proceeds of disposition less: Adjusted cost base less: Costs of disposition
= Gain or Loss less: Exemptions (S40 Reserve for amounts not yet due; Principal residence exemption)
= Capital Gain or Capital Loss times: Current year inclusion rate
= Taxable Capital Gain or Allowable Capital Loss.

Capital gains or losses are only computed at the time of disposition. For tax purposes dispositions include sales, but can also be “deemed” on change in use, death of the taxpayer, emigration of the taxpayer from Canada and on gifting of the asset to another taxpayer. ACB computations begin with accounting “laid-in cost” but may require adjustment for tax purposes in accordance with sections 52 and 53 and the ITAR’s (for assets acquired prior to 1972). The applicable inclusion rate is determined based on the date of DISPOSITION of a capital asset.

GAAR (General Anti-Avoidance Rule) under S245 provides CRA with significant potential powers to deal with various Tax Avoidance (chapter 1) schemes including those relating to capital gains.

The disposition of Depreciable Capital Property can give rise to capital gains, but can never result in a capital loss! This is due to the fact that a “loss in value” would be given a 100% deduction under the CCA system. (To allow a capital loss in addition, would be double counting this cost for tax purposes.)

S40 allows a reserve (temporary deduction or tax deferral) to be claimed where a portion of the total proceeds of disposition is “not due” until after the end of the current taxation year. The reserve is equal to the lesser of: a) a reasonable reserve = proceeds not yet due/total proceeds x gain on disposition, and b) (4 - number of prior tax years ending after the year of disposition)/5 x gain on disposition. The b) part of this formula ensures that a minimum cumulative capital gain of 20% per year is reported in any case. Thus the maximum period over which a capital gain may be apportioned under this reserve is 5 years.

Any capital gains reserve claimed in one year is included in income the following year as a gain. This ensures the integrity of the reserve system and allows a new reserve to be claimed the next year subject to the constraints of the formula.

Gains on the disposition of a Principal Residence may be exempted by “Designating” the residence as such for specific years, and thus claiming the exemption.
Principal residence - any housing unit owned by the taxpayer outright or jointly and ordinarily inhabited (at least 24 hours in a year) by the taxpayer, his spouse or child at any time in the year.
- normally includes house and up to ½ hectare of surrounding land. (May include more than ½ hectare if land necessary to “use and enjoyment”. See IT 120R5)
Designation - only necessary to designate post-1971 calendar years, in the year of disposal.
- since 1981, only one property may be designated by any taxpayer’s family unit (includes spouses and unmarried minor children) in a given tax year. (1972 - 1980 one designation per year possible per taxpayer.)
- form T2091, exemption calculation, need only be filed if some portion of gain on disposition of residence sold remains taxable.
- taxpayer must be resident in Canada for tax purposes during any calendar year which is designated.
Exemption formula = (1 + # of calendar years designated)/(# of calendar years in which property owned) x gain.
Note: The exemption for principal residence can never exceed the gain to create say, a loss. Therefore there is no benefit to designating all years of ownership.

Algorithm to maximize the principal residence exemption where more than one eligible residence is owned:
1 - Calculate the gain per year for each eligible residence.
2 - Exclude from consideration any years of ownership which have previously been designated on prior disposition of other principal residences.
3 - Allocate any “no-option” years to the only eligible residence.
4 - Allocate the minimum years necessary to maximize the exemption for each property starting from the highest “gain per year” to lowest gain per year.
5 - Check if any property has not been designated at all, and if the total exemption can be improved by designating it for at least one year...and reducing the designation of another property.

Property acquired primarily for personal use, as opposed to income earning use, most commonly results in capital losses on disposition. These losses are deemed to be personal or living costs and may not be used to offset capital gains for tax purposes. However, if a capital gain results on disposition it is taxable.
For purposes of capital gains calculations, the proceeds and the ACB of PUP is deemed to be the greater of actual proceeds (or ACB) and $1,000. This effectively excludes “smaller” PUP gains from taxation.

This subset of PUP includes works of art, jewellery, rare books, stamps & coins.
Capital losses on disposition of LPP may be used to offset capital gains from LPP only. Similarly, net capital losses of LPP in any year may be carried back up to 3 years and forward up to 7 years to offset net LPP capital gains, under Division B.

Tax issues arise in determining the ACB of specific identical assets when only a portion of those owned have been subjected to disposition. Determining the ACB of identical assets acquired over time at different prices is similar to the accounting problem of costing identical items of inventory in accounting. Stocks, bonds and mutual funds are the most common types of assets to which pooling would apply.
For tax purposes, identical assets must be grouped into a Pre-72 Pool and Post-71 Pool depending on the year of acquisition. Pre-72 Pool assets are deemed to be sold first and ACB is assigned on a FIFO basis. Post-71 Pool assets are allocated ACB on the basis of Floating Weighted Average Cost.

ACB begins with “laid-in” cost of acquisition, identical to accounting. Various adjustments to this cost base are required for tax purposes, where applicable.
The cost of inherited assets, dividends in kind or lottery prizes are deemed to be fair market value. This would be relevant in determining ACB on subsequent disposition.
Where an amount in respect of a property has been included in income under another tax provision, that amount is added to the ACB of the property. For example, stock dividends are usually taxable when received, similar to cash dividends. (The actual dividend is equal to the increase in PUC of the issuer corporation. This is often, but not always, the fair market value of the shares.) The amount of the actual dividend would be added to the ACB of the shares received.

On the exercise of employee stock options, the income inclusion under S7(1) would be added to the ACB of the shares acquired as we saw in Chapter 3.

Superficial loss rules attempt to defer the recognition of capital losses for tax purposes under a scheme known as “tax-loss selling”. This is achieved by denying some or all of a loss realized on a disposition and adding this same amount to the ACB of the remaining identical assets held.
For a disposition giving rise to a loss to be considered superficial:
1 - the taxpayer must dispose of property (usually shares or mutual fund units)
2 - the taxpayer must acquire the identical property during a period beginning 30 days before the disposition and ending 30 days after the disposition
3 - the taxpayer must own some of this property at the end of the period described in #2.

3a) Aggregate net incomes (exclude any losses) from office and employment, business, property and other non-capital sources, plus
3b) Net taxable capital gains (all taxable capital gains excluding those from LPP, plus LPP net taxable capital gains, minus allowable capital losses excluding LPP losses and ABILs), less
3c) Other deductions under subd e (RRSPs, moving expenses, child care expenses, etc), less
3d) Losses of the current year from office and employment, business, property and ABILs.

The ITARs are transitional provisions, designed among other things, to eliminate gains and losses accrued prior to 1972, but realized after that date, from taxation.
ITAR 26(3) or the Median Rule applies automatically to all taxpayers. It establishes the ACB of non-depreciable capital property held on December 31, 1971 to be the median value of a) proceeds of disposition, b) V-Day value, c) cost.
As an alternative, individuals only, may elect to use ITAR 26(7) which establishes ACB of such property to be V-Day value. (Fair market value on December 31, 1971; December 22, 1971 for publicly traded securities) This election must be made the first time the two ITARs provide different ACB figures and must be used continuously thereafter.…...

Similar Documents

Premium Essay

Careers at Capital One - Case Introduction

...appointed the manager of the Cross Sells team at Capital One, which evaluates opportunities to market non-credit card products to our credit card customers. These cross sells usually involve building relationships with outside vendors who sell us products that we, in turn, can sell to our customers at a premium. One potential cross sell opportunity that is sitting on your desk right now is the Prepaid Phone Card - a piece of plastic you can use to pay for long distance telephone calls. You use the card by calling in to a 1-800 number, entering the card's PIN number, and then entering the destination telephone number. The minutes left on the card are kept track of by the outside vendor - your only responsibility is to market the product in a way that maximizes profit for Capital One. Take a few moments to consider some of the most important factors that will influence your decision on whether to pursue the Phone Card cross sell. When you've come up with some ideas, click here to continue. Below is a list of some of the most important questions you should consider. Please take a moment to compare your list with the one below. Hopefully, you'll find a few of your answers on the list, plus a few more that you hadn't thought of. How much does each Phone Card cost Capital One? Are there any other costs involved, such as...

Words: 2266 - Pages: 10

Premium Essay

Capital Gains Tax Reliefs and Exemptions and Offsets Against Assessable Income.

...Name: Jacqui Atkinson Student Number: 201116672 Unit Coordinator: Kip Werren Capital Gains Tax Reliefs and Exemptions and Offsets against Assessable Income. Word Count: 2265   Introduction: 2   Jack, a former cattle farmer, bought a property of fifty hectares on 15 June 2009 for $410,000 with a house on a one hectare fenced off area. He ran cattle on the remaining forty-nine hectares, which had already been fenced off into suitable paddocks, from 1 July 2009. On 31 January 2011, Jack subsequently sold the fifty hectares due to ill health at the age of 35; this sale produced a capital gain of $80,000. During this time Jack had losses from his cattle farming in both the 2009/2010 and 2010/2011 financial years of $2,350 and $1,250 respectively, and also received income from other sources in those years ($45,000 and $23,000 respectively). Issues: Jack is seeking advice in regards to capital gains exemptions and reliefs that can be attributed to the sale of the property. Jack is also seeking advice in reference to offsetting his losses from his cattle farming enterprise against other assessable income that he earned in the 2010/2011 financial year. The issue of capital gains exemptions and reliefs available can be covered under Division 152 of the Income Tax Assessment Act 1997 (Cth) (furthermore referred to as ITAA97) which allows exemptions to small businesses for the capital gains tax so long as specific conditions are satisfied. Section 115-A of ITAA97......

Words: 2632 - Pages: 11

Premium Essay

Introduction to Capital Markets

...INTRODUCTION TO CAPITAL MARKETS What is investment banking? Investment banks act as intermediaries in capital markets, helping the matching of sellers and buyers of various securities and advising institutional investors, government and companies on their investment strategies, on their financing needs (helping them to raise money) and their acquisitions. Two main areas: (1) Securities or capital markets divisions: trading in the equity, fixed income ,FX and commodities markets and advising and intermediating for institutional investors in those markets. (2) Corporate Finance and public finance (often referred to as investment banking) advising corporations and governments on their financing needs, including the underwriting of securities, on their merger and acquisition activities, or on their restructuring. Securities and capital markets divisions Clients are usually * Institutional investors, corporates or public entities, not private clients; * Mutual funds asset managers; * Pension Fund asset managers; * The insurance companies; * Private Banks; * Hedge Funds; * The treasury departments of large banks or large companies. Capital markets divisions * Equity division: equity research, equity sales, equity trading on cash, flow derivatives and structured products * FIRC or FICC (Fixed Income, currencies and derivatives): * Fixed income cash products, interest and credit......

Words: 3043 - Pages: 13

Premium Essay

More Pain Than Gain

...More pain than gain Sep 14th 2006 From The Economist print edition Many workers are missing out on the rewards of globalisation RICH countries have democratic governments, so continued support for globalisation will depend on how prosperous the average worker feels. Yet workers' share of the cake in rich countries is now the smallest it has been for at least three decades (see chart 5). In many countries average real wages are flat or even falling. Meanwhile, capitalists have rarely had it so good. In America, Japan and the euro area, profits as a share of GDP are at or near all-time highs (see chart 6). Corporate America has increased its share of national income from 7% in mid-2001 to 13% this year. Like so many other current economic puzzles, the redistribution of income from labour to capital can be largely explained by the entry of China, India and other emerging economies into world markets. Globalisation has lifted profits relative to wages in several ways. First, offshoring to low-wage countries has reduced firms' costs. Second, employers' ability to shift production, whether or not they take advantage of it, has curbed the bargaining power of workers in rich countries. In Germany, for example, several big firms have negotiated pay cuts with their workers to avoid moving production to central Europe. And third, increased immigration has depressed wages in sectors such as catering, farming and construction. Most of the fears about emerging economies focus on jobs......

Words: 2559 - Pages: 11

Premium Essay

Income Tax Australia - Capital Gains Tax

...Income Tax Law Assessment Two Question One - Capital Gains Tax The CGT consequences for the year 2006/2007 for Cynthia are as follows: Firstly, in January 2007 Cynthia incurs a CGT event A1, by selling her house. As the original acquisition of the house was contracted in November 1999, (s. 104-10(3b) if there is no contract, then when the change of ownership occurs.). The discount method can be used to form the cost base and the indexation method will be disallowed as this is only available for assets acquired before 21 September 1999. With this in mind the gain/loss will be calculated by: Capital proceeds from this event: Sale of house 600,000 Take over of loan 10,000 610,000 Cost base: Acquisition cost 450,000 Incidental acquisition costs 20,000 Capital enhancement expenditure 10,000 Council rates 1,200 481,200 Capital Gain 128,800 Then you take 50% of this nominal gain of 128,800 to calculate the capital gain figure that will be included in your tax, which becomes: 128,800/2 = 64,400 The $10,000 loan which the purchaser has agreed to take on becomes part of the capital proceeds under s116-55. Acquisition costs are at market value, of the time the acquisition took place in this case it was $450,000 as in s116-30(1) which states if you are given a CGT asset that you are taken to have received it at market value. The......

Words: 1129 - Pages: 5

Premium Essay

No Pain No Gain

...Food for Thought “No pain, no gain!” Many of us have heard this quote by Arnold Schwarzenegger. Have you thought to yourself, “How does or how can I apply this to me?” Well I have and I am on a journey to push my limits and achieve more in personal strength and my athletic abilities. All my life, I grew up playing sports. My fondest memories were those long hours spent in the gym practicing my pull-up jumper in basketball or those sweat and tears left behind on the school track. I live for competition and know that health and nutrition in bodybuilding is vital. To be a winner, one must be the fastest, strongest, and most trained. Our bodies are our engines, and we must put the correct fuel in them to keep them going to work at their full potential. The three well-known, tested workout meal plans that I have researched are: Arnold Schwarzenegger, P90X, and Johnny Ahl’s plan. This paper seeks to explore what each bodybuilding meal plan entails and how these popular plans compare and contrast. I will begin with the history of bodybuilding and nutrition; then I will break down each meal plan one by one and compare the plans. The goal of this research will be to find out what it requires to gain lean muscle mass for strength and performance in sports. In fact the website, has 162 articles on how bodybuilding can improve sport performance in many different sports. Giving clear studies and research on how muscle strength and training play a significant......

Words: 1736 - Pages: 7

Premium Essay

Capital Gains

...CAPITAL GAINS TAX (CGT) PFP 14/15 Introduced in 1965 to tax assets which were not bought and sold as part of a trade. A CGT liability may arise when a chargeable person makes a chargeable disposal of a chargeable asset. CHARGEABLE PERSON • individuals resident in UK • partnerships - assessed on individual partners • companies - pay corporation tax on chargeable gains CHARGEABLE DISPOSAL • sale or gift of part or all of an asset • receipt of insurance claim following loss of chargeable asset • loss or destruction of a chargeable asset Certain disposals are not subject to CGT because of the nature of the recipient • disposals by gift to charity • disposal by gift to institutions which exist for public benefit e.g. museums • disposals between spouses: Disposals between a husband and wife (or civil partners) who live together at any time during the tax year in which the disposal occurs are chargeable disposals. However, such disposals are deemed to occur at a disposal value such that neither a chargeable gain nor an allowable loss arises on the disposal. • disposals of chargeable assets caused by death: Net capital losses incurred in the tax year in which the taxpayer dies obviously cannot be carried forward Therefore such net losses may instead be carried back and set off against net gains of the previous three tax years (later years......

Words: 2763 - Pages: 12

Free Essay

Unrealized Gain

... Cash 1000000 (d) The unamortized premium is 204234 at sep 30 2019, so the journal entry is Debit bonds payable(4396248*0.4+204234 *0.4) 1840192 Credit Cash(4396248*1.02*0.4) 1793669 Gain on redemption bond 46523 10. Year Depreciation 2014 6875 2015 11000 2016 11000 2017 11000 2018 24853 Book value when sale=120000-(6875+11000+11000+11000+4853)=75272 After-tax gain=78000-75272=2728...

Words: 293 - Pages: 2

Premium Essay

Capital Gains

...Capital Gains A majority of people in America can hardly imagine an existence without capitalism; individuals consume without a thought when we buy the latest cell phone or a new pair of hundred dollar designer jeans. It is clear that most of the world supports some form of capitalism and therefore, at least for now, capitalism has won the struggle between economic systems. Capitalism began in 1200 CE with rug merchants. Just like many traders, today, the rug merchants had to borrow money to buy their wares in order to then resell them for profit, but they had to pay back the money borrowed—usually with interest. This was called mercantile capitalism and it was a global phenomenon, from the Indian and Chinese Ocean trade to Muslim merchants who funded trade caravanserai across the Sahara. Later, merchants in Britain had expanded capitalism by developing stock companies which financed even bigger trade missions. Increased wealth of course resulted by the increased investment, but it only affected as small percentage of the population and did not create cultural influence from capitalism. Mercantile capitalism only affected a small percentage of the population, whereas industrial capitalism impacted majority of the population. Industrial capitalism was something altogether different, both in practice and scale. According to Joyce Appleby’s definition of industrial capitalism: “An economic system that relies on investment of capital in machines and technology that are......

Words: 2337 - Pages: 10

Premium Essay

Gain Sharing

...To do this there is a need to recruit and retain valuable employees. Gain sharing is one such way to achieve this goal. Offering a productivity gain sharing incentive can encourage better teamwork, improve productivity, more employee involvement, and improve customer satisfaction while lowering costs. This incentive plan is based on actual performance and is paid out after the desired results are realized. This could make a substantial positive impact on the bottom line. Circle Works is a leader in the bicycle industry. This company was founded 50 years ago on the basis that hard work, has and will continue to make this company a success. The custom built bikes are a consistent demand for the company. Today's technology has made many advances in this field. The design engineers have made great advances in ways to make the bicycles fit today's standards. The production teams that work hands on with these products everyday also have intricate knowledge on how to put these bicycles together with care and quality. With a new generation of bike builders entering the workforce, it is vital to the company to be able to recruit and retain valuable employees. Gain sharing is one such way that will enable this company to do precisely that. Gain sharing is an incentive program that provides employees with an incentive payment based on improved company performance. Productivity gain sharing plans are based on a mathematical formula that compares a......

Words: 610 - Pages: 3

Premium Essay

Introduction on Human Capital Activities

...Human capital management (HCM) is concerned with obtaining, analyzing and reporting on data that informs the direction of value-adding people management, strategic investment and operational decisions at corporate level and at the level of front line management. The defining characteristic of HCM is this use of metrics to guide an approach to managing people that regards them as assets and emphasizes that competitive advantage is achieved by strategic investments in those assets through employee engagement and retention, talent management and learning and development programmes. The Accounting for People Task Force Report (2003) stated that HCM involves the systematic analysis, measurement and evaluation of how people policies and practices create value. The report defined HCM as 'an approach to people manage¬ment that treats it as a high level strategic issue rather than an operational matter "to be left to the HR people" '. The Task Force expressed the view that HCM 'has been under-exploited as a way of gaining competitive edge'. As John Sunderland, Task Force member and Executive Chairman of Cadbury Schweppes pic commented: 'An organization's success is the product of its people's competence. That link between people and performance should be made visible and available to all stake¬holders.' Nalbantian el al (2004) emphasizes the measurement aspect of HCM. They define human capital as, 'The stock of accumulated knowledge, skills, experience, creativity and other......

Words: 634 - Pages: 3

Premium Essay

Gain Sharing

...OL 325: Case Study Chapter 5: Gain Sharing at CircleWorks Tanya DeSilva Southern New Hampshire University There are several ways that CircleWorks would benefits from gain sharing. The information below will outline the advantages of gain sharing. I will also be including when gain sharing works best and the best way to implement gain sharing. The advantages of gain sharing are that it would help the company to achieve sustained improvement in key performance measures (Masternak). It would reward only performance improvement within the company. The payouts are self-funded from savings generated by the plan (Masternak). Gain sharing aligns employees to organizational goals that need to be met. Gain sharing fosters a culture of continuous improvement. This is something that the company will only benefit from going forward. It enhances employee focus and awareness by giving the employees a sense of empowerment. It increases the feeling of ownership and accountability. Employees feel like they are part of something bigger and don't just have a job. It enhances the level of involvement, teamwork and cooperation. This is currently something that is not uniform. There are only a few teams that work very well together. It supports other performance improvement efforts and helps promote positive change. And lastly, it promotes morale, pride, and more positive attitudes toward the organization (Masternak). Gain sharing would work best for CircleWorks because the......

Words: 582 - Pages: 3

Free Essay

Cspital Gain

...TAX ON SHORT-TERM CAPITAL GAINS Introduction Gain arising on transfer of capital asset is charged to tax under the head “Capital Gains”. Income from capital gains is classified as “Short Term Capital Gains” and “Long Term Capital Gains”. In this part you can gain knowledge about the provisions relating to tax on Short Term Capital Gains. Meaning of Capital Gains Profits or gains arising from transfer of a capital asset are called “Capital Gains” and are charged to tax under the head “Capital Gains”. Meaning of Capital Asset Capital asset is defined to include: (a) Any kind of property held by an assesse, whether or not connected with business or profession of the assesse. (b) Any securities held by a FII which has invested in such securities in accordance with the regulations made under the SEBI Act, 1992. However, the following items are excluded from the definition of “capital asset”: i. any stock-in-trade (other than securities referred to in (b) above), consumable stores or raw materials held for the purposes of his business or profession ; ii. personal effects, that is, movable property (including wearing apparel and furniture) held for personal use by the taxpayer or any member of his family dependent on him, but excludes— (a) jewellery; (b) archaeological collections; (c) drawings; (d) paintings; (e) sculptures; or (f) any work of art. “Jewellery" includes— (a) ornaments made of gold, silver, platinum or any other precious metal or any...

Words: 7636 - Pages: 31

Free Essay

Introduction to It

...David W. Dumond Introduction to IT (IT190-1502B-06) June 17, 2015 Individual Project(s) Contents Section 1: Information Systems Overview 3 Section 2: Information Systems Concepts 7 Section 3: Business Information Systems 11 Section 4: System Development 15 Section 5: Information Systems and Society 17 References 20 Section 1: Information Systems Overview The York County Sheriff’s Office is a law enforcement agency tasked with the regional enforcement of state criminal and motor vehicle statutes. The sheriff’s office also serves as the York County public safety answering point (PSAP). Calls for service are received at the PSAP and then dispatched via radio and computer terminal to law enforcement officers assigned to respond. Leading up to the use of Information Systems such as computer aided dispatch (CAD) the PSAP relied on radio’s to communicate information to the law enforcement officers. With the development of CAD and Record Management Systems (RMS) the sheriff’s office recognized the value of these systems and in 2007 adopted IMC CAD+RMS (Information Management Corporation CAD+RMS, 2007). IMC is a multifaceted information dissemination system utilized by dispatchers in the PSAP, emergency responders and their records management departments. IMC utilizes a closed stand-alone network and was developed for emergency management services such as fire, rescue and law enforcement departments. It is expandable and can be provisioned based on the......

Words: 4524 - Pages: 19

Free Essay

No Pain No Gain

...No Pains, No Gains Walking in the shopping mall of Venetian, not like other tourists and how I felt before, I was nervous and intense. "Quickly, the shop is right there.” Hearing my companion’s words, I even felt more difficult to walk. After several steps I clearly saw that many customers were in that shop, and they looked like happy and enjoyable. Whether should I step into the shop, I was confused and at that moment a voice from the bottom of my heart said that, "you have no choice but to go.” Then, I took a deep breath and stepped into the shop without hesitation. The National Day was coming, for most people, it was an exciting news, but when the captain of our publicist organization told us that it was time for us to act, for we would hold a big evening party for celebrating the National Day, and our task was to find some sponsors to support our activity. You know it was my first year in the University, and it was not long before I became a member of the publicist organization in our school. I felt high pressure on my shoulders and I even couldn't breath. Many people ever had experience looking for sponsors to offer money or goods for their activities in their high schools, and for me, I never had that experience even didn't know the whole process to find sponsors. Who could I turn to for help? I was depressing. To finish the rough task as early as possible, we were divided into several groups. After a hot discussion, we finally came to an agreement......

Words: 1000 - Pages: 4