With reference to Capital Gains and the Capital Gains Tax in India, consider the following statements:1.Capital gains tax is levied on both financial and non-financial assets.2.Raw materials held by a person for the purposes of business are not categorized as Capital Assets.Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: C

Notes:

Both statements are correct.

Statement 1 is correct:Capital Gains Tax is levied on the profits made on investments. It covers real estate, gold, stocks, mutual funds and various other financial and non-financial assets.
Statement 2 is correct:Consumable stores or raw materials held for the purposes of business or profession are excluded from the category of capital assets.

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