​​The taxability of capital gain depends on the nature of gain, i.e. whether short-term or long-term. Hence to determine the taxability, capital gains are classified into short-term capital gain and long-term capital gain. In other words, the tax rates for long-term capital gain and short-term capital gain are different. Similarly, computation provisions are different for long-term capital gains and short-term capital gains.​

​As per section 54EC – An assessee can claim tax relief by investing the amount of long-term capital gain arising from: a) any long term capital asset (upto A.Y 2018-19) b) long term capital asset being land or building or both (From A.Y 2019-20) in the specified bonds as follows: a) Bond redeemable after 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) issued by National Highways Authority of India (NHAI) or b) Bond redeemable after 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) issued by Rural Electrification Corporation Limited (REC) or c) Bond redeemable after 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) issued on or after 15th June 2017 by Power Finance Corporation Limited or d) Bond redeemable after 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) issued on or after 08th August 2017 by Indian Railway Finance Corporation Limited or e) Bond redeemable after 5 years from A.Y 2019-20 (3 years for A.Y 2018-19) issued by any other authority but notified by Central Government [Applicable from A.Y 2018-2019] within a period of 6 months from the date of transfer of capital asset and such bonds should not be redeemed before 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) from the date of their acquisition. This benefit cannot be availed in respect of short-term capital gain. Maximum amount of investment in specified bonds cannot exceeds Rs. 50,00,000. Thus, deduction under section 54EC cannot be claimed for more than Rs. 50,00,000.

​​• Profits and gains earned from sale of land or building or both are chargeable to tax under the head “Capital Gain” • In the case of sale of land or building or both, the value determined by stamp duty authorities will be considered as full value of consideration if the following conditions are satisfied – a) The asset transferred is land or building or both. b) Sale Consideration is less than the value as determined by the stamp duty authority for the payment of stamp duty. c) Stamp Duty value exceeds 105% of the consideration received or receivable on account of transfer. [Applicable from A.Y 2019-20]. • For the purpose of valuation, stamp duty valuation shall be considered on the date of registration of the property. Exception – Where the date of agreement fixing the consideration and date of registration are not same, then the stamp duty value will be considered on the date of agreement for such transfer. The above exception will be applicable if – a) Full consideration or part there-of is received by an account payee cheque/draft or by use of electronic clearing system through a bank account. Or through such other electronic mode as may be ​prescribed.​b) Such amount is received before the date of agreement. c) It is applicable from the A.Y 2017-2018.

Receipts can be classified into two kinds: A) Revenue receipt, B) Capital receipt. Revenue receipts are recurring in nature like salary, profit from business, interest income, etc. Capital receipts are generally of isolated nature like receipt on account of sale of residential building, personal jewellery, etc. ​