Accounting entry of Capital Gain on Property
This query is : Resolved
04 February 2010
If A has sold his Residential property at Rs.25,00,000/- in 2008-09 which was purchased at Rs.3,00,000/- in 1981-82 and purchased new residential property in 2007-08 at Rs.12,00,000/-, what would be the accounting entry in books.
If A has sold his Residential property at Rs.25,00,000/- in 2008-09 which was purchased at Rs.3,00,000/- in 1981-82 and purchased new residential property in 2007-08 at Rs.12,00,000/-, what would be the accounting entry in books.
04 February 2010
Dear Sandip,
From your question it seems that there are two propoerties and the second one has nothing to do with the first one because it was puchased in 2007-08 and the fist on is sold on 2008-09, as far as the accounting treatments are concerned. Capital gain is a taxation matter and it will not reflect in books thru accounting entry. Only profit in selling the property will appear in the books of accounts.
From your question it seems that there are two propoerties and the second one has nothing to do with the first one because it was puchased in 2007-08 and the fist on is sold on 2008-09, as far as the accounting treatments are concerned. Capital gain is a taxation matter and it will not reflect in books thru accounting entry. Only profit in selling the property will appear in the books of accounts.
04 February 2010
You are confusing accounting & taxation. If you go by Accounting in 2008-09 you book a profit of 2200000 & purchase of another property will stand in books at 1200000/-.
If you go by taxation, you will take advantage of indexation & calculate capital gain & pay tax thereon.
If you go by taxation, you will take advantage of indexation & calculate capital gain & pay tax thereon.
04 February 2010
In which year do you want to pass the entries,in the year of sale or in the current accounting year? In that year which account did you credit the sale proceeds to? was it routed through bank? The entry will depend on your answer to these querries
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation of fixed assets- coop housing society in mumbai
- TDS on Consultancy- Non DTAA
- Reopen of assessment proceeding
- EPF FULL & FINAL RULES IN 2026
- EXPORT BILL UNDER LUT FREIGHT CHARGE INCLUED IN INVOICE IT LIABLE TO TAX
- Tax Audit u/s 44AB for Transport Business A proprietorship is engaged in transportation business and
- Management System (IMS)
- Foreign lottery ticket bought online from India: legality, tax and consequences
- Gift Received from nonblood relative
- Reprocessing of rectification order AY 2025-26
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
