Search Results For: 48


QUERY: Purchase of flat under self finance scheme: An assessee booked a flat with RHB under self financing scheme & paid regular instalments. The flat was booked in 2006 and the amount was paid till 2011. The flat was allotted in 2010 & possession was given in 2011. What will be the date of acquisition & position of indexation of instalment.
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Explanation to section 48 of the Act, defines “indexed cost of acquisition” means an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the year in which the asset is transferred bears to the Cost Inflation Index for the first year in which the asset was held by the assessee or for the year beginning on the 1st day of April, 1981 whichever is later.

QUERY: A person acquired inherited property before Independence. Thereafter, he had obtained, the court order for legal heirship in the Financial Year 1991/92, At that time stamp duty was paid amounting to Rs. 1,98,840/-. Can it be considered as cost for indexation?
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QUERY: Amount paid to tenants for vacating the house against compensation (Pagidi). Can I treat the entire compensation which was paid to the tenant while calculating capital gains ?
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Amount paid to tenants for vacating the house can be deducted while calculating capital gains tax under section 48 of the Act.

QUERY: Cost to be taken on the basis of original cost of land surrendered or the estimated value on the date of allotment? What should be the period of holding?
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The term ‘exchange’ has been specifically defined in section 118 of the Transfer of Property Act,

QUERY: Payment of regular installment for the house to be allotted. The house has been booked but the same will the delivered later on after several years (Possession later on – on completion of project by the housing board of the Govt./ Builders). It can be illustrated as under:

1. House booked & advance taken 1-4-1995

2. Installment payment on regular basis from 1-4-1996

3. House allotted (No. given) 1-4-2007

4. Possession given 1-4-2008

5. Registration u/s 17A 30-10-2008

6. Sold on 30-9-2011

What will be position of indexation for the cost of acquisition? What will be the date of acquisition?
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From the fact it is clear that house is held by the assessee from 1-4-2008 when the possession is received. Therefore indexation would be available from the same date

QUERY: A person acquired inherited property before Independence. Thereafter, he had obtained, the court order for legal heirship in the Financial Year 1991/92, At that time stamp duty was paid amounting to Rs. 1,98,840/-. Can it be considered as cost for indexation?
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Section 49(1) provides that where the capital asset acquired by an assessee by way of inheritance, the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it. In this case,

QUERY: Y wishes to sell his vacant land. The real estate agent is offering him another piece of land in exchange. Y want to retain the land as an investment and not construct any building. Will the exchange be subject to capital gains even though Y had not received any monetary consideration.
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The definition of transfer under section 2(47) of the Act is an inclusive definition and includes an “exchange”. So, here Y is exchanging his land with another land.

QUERY: We have been approached by a builder for the redevelopment of our building. He says he will demolish parts of the building and reconstruct with more area. The society will be paid Rs. 1 crore while the members will be paid Rs. 25 lakhs each. He will retain a part of the area as his profit. Are the said sums chargeable to tax in the hands of the society and members?
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No. If no ‘cost of acquisition’ is attributable to the development rights, the gains arising on their transfer are not assessable in either the hands of the society or in the hands of the members.

QUERY: I am holding some shares for investment purposes and other shares for trading. I have made gains from the investment shares. Is the AO correct in treating the gains as business income?
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No! One has to be careful to ensure that there is a proper segregation of the shares held on investment account from the shares held on trading account. The investment shares must be valued at cost while the trading shares can be valued at market price if that is lower.