Section 48 of the Income-tax Act, 1961 outlines the method for computing capital gains. It applies when a taxpayer sells a capital asset, and the gains from this sale are subject to tax. The section specifies that the income chargeable under the head 'Capital Gains' shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset, the following amounts: (i) expenditure incurred wholly and exclusively in connection with such transfer, and (ii) the cost of acquisition of the asset and the cost of any improvement thereto. This section is significant as it provides the statutory framework for determining the taxable amount of capital gains, ensuring that only the net gain is taxed, after accounting for associated costs. The burden of proof lies on the taxpayer to substantiate the expenses claimed. In practice, this section is crucial for taxpayers to understand how to calculate their tax liability accurately when disposing of capital assets.