Costing and Taxation · Ch 2 — Income from Capital Gains
Transfer of a Capital Asset
2.3
Transfer of a Capital Asset
'Transfer', in relation to a capital asset, is defined very broadly under Section 2(47) — far more broadly than the everyday word 'sale' — precisely so that Section 45(1)'s charge cannot be avoided merely by structuring a disposal so that it does not look like a conventional sale.
Note
'Transfer' includes — Section 2(47)
- Sale, exchange, or relinquishment of the asset.
- Extinguishment of any rights in the asset.
- Compulsory acquisition of the asset under any law.
- Conversion of the asset into stock-in-trade of a business carried on by the assessee.
- Maturity or redemption of a zero-coupon bond.
- Any transaction allowing possession of an immovable property to be taken or retained in part performance of a contract of the kind referred to in Section 53A of the Transfer of Property Act, 1882 — even where no registered sale deed has yet been executed.
- Any transaction that has the effect of transferring, or enabling the enjoyment of, an immovable property, by becoming a member of, or acquiring shares in, a co-operative society, company, or other association of persons. …
Definition 1Transfer [Section 2(47)]
Includes sale, exchange, relinquishment, extinguishment of rights, compulsory acquisition, conversion into stock-in-trade, maturity/redemption of a zero-coupon bond, and certain possession-based immovable-property transactions under Section …