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.
Amount paid to tenants for vacating the house can be deducted while calculating capital gains tax under section 48 of the Act.
||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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||CA. H. N. Motiwalla
||capital gains, cost of acquisition, indexation
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
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,
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.
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.
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.