What are Capital Gains?

Basis of charge [Sec. 45(1)]
Capital gains mean any profits or gains arising from the transfer of a capital asset. Such
gains are taxed under the head ‘Capital Gains’ in the previous year in which the transfer of
the capital asset takes place. If there is a loss, it is called as capital loss. Thus, income is
charged under the head ‘Capital Gains’, if the following conditions are satisfied:
(i) There should be a ‘capital asset’.(ii) There should be a ‘transfer’ of such capital asset.
(iii) Such transfer should take place in the ‘previous year’.