Under which of the following circumstances may 'capital gains' arise? 1) When there is an increase in the sales of a product 2) When there is a natural increase in the value of the property owned 3) When you purchase a painting and there is a growth in its value due to increase in its popularity Select the correct answer using the codes given below:

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CollectorBabu · Accepted Answer

Correct Answer: 2 and 3 only. Capital gain results due to increase in value of asset thereby giving higher value compared to purchase price. Statement 1 is not relevant as capital gain is not related to quantity of product sales. Statement 2 is correct as capital gain also relates to natural increase in price of property owned. Statement 3 is correct as capital gain can also be applied with increasing price of painting which result due to its popularity. Hence statement 2 and 3 are correct, so correct option is B..

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