Capital gain

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Vibhor Pandey (Querist)
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24 September 2011 My Question Is Related To Section 45(5) Deals With Computation Of Capital Gain In Case Of Compulsory Aquisation Of a Capital Asset.My Question Is..
(1)How We Calculate Period Of Holding In Such Cases. For Example If A Capital Asset Is Purchased In 1985 And Was Aquaired By Government In 1986 For Rs. 2500000. On May 2011 The Owner Gets 500000 Rupees As Part Payment From Government.
How Will We Treat This?
it is STCG OR LTCG??

(2) when enhanced Compensation received in installments how we treat that.
like..The High Court Increse The Compensation From 5000000 to 9000000 the additional compensation of 4000000 is receved as 2500000 in that year and remaining 1500000 in next year. how it will taxable??

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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26 September 2011 1. The period of holding shall be from the date of purchase to the date of compulsory acquisition.

In the above problem, the gain is STCG as it has been sold within a period of 3 years.

2. The enhanced compensation will always be STCG/LTCg based on the original gain.

In the above instance, the enhanced compensation will be STCG as the original gain was STCG.

It will be taxable in the year of ACTUAL RECEIPT.

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