23 September 2015
My client has acquired jewelry from his relatives in 2007 and sold it in the year 2014-15. In this case cost to the previous owner will be taken as cost of the assessee, but in this case indexation if i'm right will come from year of acquisition as gift please correct me if i'm wrong
But as per section 49 (1) (ii) : cost to previous owner can be opted.
So your assesse has a CHOICE of either to take cost as NIL or go by section 49(1)(ii)
If the previous owner has acquired the asset (Jewellery in your case) before 01/04/1981, the Fair Market Value as on that date may be replaced as COST to previous owner.
If the previous owner has acquired the asset after 01/04/1981, the actual cost to the previous owner shall be taken.
The indexation to the same has to be applied from 1/04/1981 or the year of purchase as the case may be. (And not from 2007 as queried by you)
CAclubindia
