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Railways PYQCBT 2 2017

RRB NTPC · Question 41

Which one of the following best describes the term 'capital gains tax' in India?

  1. Tax on dividend received from corporate bonds.

  2. Tax on profit from the sale of a capital asset during a year.

  3. Tax on interest received from bank fixed deposits.

  4. Tax on profit from sale of shares held for more 12 months.

Show answer & explanation

Answer: (B) Tax on profit from the sale of a capital asset during a year.

Explanation

Capital gains tax is levied on the profit made from transferring (selling) a capital asset such as land, a building, shares or jewellery. It covers both short-term and long-term gains, not only shares held for over 12 months.