Capital gain

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Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2011 in capital gain if capital asset is gifted means cost of previous owner will be taken into consideration when we should see this plz help me with this sir

CS Bijoy

CS Bijoy (Expert)
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21 September 2011 In case of gift no consideration was received so capital gain not raised.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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21 September 2011 I'll explain with the help of an example.

Suppose Mr. A purchased a property on 1.4.1990 for Rs. 5 lakhs.

On 1.4.2000, he gifted the property to his son, Mr. B.

This transaction is exempt from capital gain and there will no tax liability on Mr.A.

On 1.10.2011, Mr. B sold the property.
This transaction is taxable in the hands of Mr. B.

While computing capital gain, cost of acquisition shall be that of the previous owner, i.e. Mr A.

So the cost of acquisition for Mr. B shall be Rs. 5 lakhs,

Hope it is now clear.

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