Transfer [Section 2(47)]:

The term transfer in relation to capital asset in inclusively defined by clause 47 of section 2 of Income tax Act. Thus transfer in relation capital asset includes:

(i) the sale, exchange or relinquishment of the asset; or

(ii) the extinguishment of any right therein; or

(iii) the compulsory acquisition thereof under any law; or

(iv) in a case where the asset in converted by the owner thereof into, or is treated by him as, stock in trade of a business carried on by him, such conversion or treatment; or

(iva) the maturity or resumption of a zero coupon bond.

(v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882; or

(vi) any transaction ( whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring ,or enabling the enjoyment of, any immovable property.

Therefore, all the following ways of parting with capital assets for consideration are brought within the taxation net of capital gains;

(a) Sale,

(b) Exchange,

(c) Relinquishment

(d) Compulsory acquisition

(e) Extinguishment of any right in the assets,

(f) Conversion of capital asset into stock in trade

(g) Maturity or redemption of zero coupon bond,

(h) Transfer of rights in the immovable property only through agreement to sell and giving possession thereof, and

(i) Transfer of immovable property by means of agreement, transfer of shares or arrangement of enabling the enjoyment thereof.

Profits or gains arising from the transfer of an immovable property, held as a capital asset, are taxed under the head "Capital Gains". The incidence of tax on Capital Gains depends upon the period for which the capital asset under consideration was held before the transfer.