| Consider the following statements regarding Capital Gain: |
| 1. A capital gain tax is a voluntary tax payable on the sale of assets, investments, capital accumulation, and productivity. |
| 2. In case of a long-term capital gain related to sale of property, factors such as inflation are usually taken into consideration. |
| 3. If you sell an investment within four years from the date of its purchase, it will be defined as a short-term capital gain. |
| Of these statements: |
A) 1, 2 and 3 are correct
B) 2 and 3 are correct
C) 1 and 2 are correct
D) 1 and 3 are correct.
Correct Answer: C
Solution :
[c] As per Indian Income Tax laws, a capital gain tax is a voluntary tax payable on the sale of assets, investments, capital accumulation, and productivity. A Capital Gain can be defined as an any income generated by selling a capital investment. A capital investment can be anything from business stocks, paintings, and houses to family businesses and farmhouses. The 'gain' here, refers essentially to the difference between the price originally paid for the investment and money received upon selling it.
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