[A] Transfer of Property as per Transfer of Property Act 1882
(i) Action by which a person conveys property, in present or in future, to one or more other persons.
(ii) Person includes a company or association or body of individuals, whether incorporated or not.

[B] Charge ability under the Income Act, 1961
Any profit or gain arising from sale or transfer of a capital asset is chargeable to tax under the head “Capital Gain” .

Types of capital assets:
1. “Short Term Capital Asset” means capital asset held by an assessee for less than 36 months immediately prior to its date of transfer.
2. A capital asset other than above is regarded as “Long Term Capital Asset”.

[C] Transfer of Capital Assets.
Transfer, in relation to a capital asset, includes, sale, exchange, relinquishment of the asset or extinguishment of any rights therein or the compulsory acquisition of the asset (under any law).

[D] Capital Gain on Transfer of Capital Assets.
Profits or gains arising from such transfer os asset in the previous year shall, be
chargeable to income tax and shall be deemed to be the income of the previous year in which the transfer took place.

[E] Mode of Computation of Capital Gain:-
Profit or gain arising from such transfer shall be computed as follows:-
a. Value of consideration received / receivable
b. Less:
1) Expenditure incurred in connection to such transfer.
2) Cost of acquisition.
3) Cost of improvement.
Thus, the resultant will be treated as Capital Gains

Note:
a. Indexation benefit with respect to cost of acquisition and cost of improvement can be availed if the asset transferred is a long term capital asset.
b. Tax on short term capital gain is calculated at normal rate of tax applicable to assesses.
c. Tax on Long term capital gain is calculated at special rate of tax i.e. 22.66% (including Surcharge and education cess).

[F] In following cases the transfer will not be considered as “TRANSFER”
Where the capital asset becomes the property of the person,
a. On any distribution of assets on the total or partial of a Hindu Undivided Family.
b. under a gift or will.
c. by succession, inheritance or devolution, or on any distribution of assets on the dissolution of a firm, body of individuals, or other association of persons, where such dissolution had place at any time.
The cost of acquisition of the asset shall be deemed to be the cast for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assesses, as the case may be.

[G] Special provision for full value of consideration in certain cases
In the sale consideration arising on transfer of a capital being land or building or both (whether depreciable or not) is less than the assessed by the authority of state government for the purpose of stamp duty, the value assessed by the authority of state government shall be treated as consideration received or receivable.

[H] Advance Money Received
Where an assesses, on any previous occasion, forfeits any advance or other money received in respect of negotiations for transfer of the asset, shall be deducted from the cost for which the asset was acquired or the written down value or the fair market value, as the case may be, in computing the cost of acquisition.