Can anyone plz explain the concept of Sec 51 ie Treatment of Advance Money recieved by the assesse?
Somaas Kandan (CA Final) (385 Points)
09 August 2013Can anyone plz explain the concept of Sec 51 ie Treatment of Advance Money recieved by the assesse?
CA Pallav Singhania
(❤ Work Hard Party Harder ❤)
(32532 Points)
Replied 09 August 2013
Section 51 of the Income-tax Act, 1961 provides that any advance forfeitedby the seller of a property is deductible from the cost of the asset.
Theeffect of this provision is that subsequently when the same asset is sold,
a larger amount becomes taxable as capital gains in view of the original costbeing reduced to the extent of the amount forfeited.
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