Capital Gain on House Property
This query is : Resolved
CA CS Akashdeep Singh
(Querist)
13 March 2009
Hello
I am facing the problem while computing the capital gain on house property.
PROBLEM
My client purchased house on 10 yearly installments. He took possesion in year of down payment. In current year he sold it. Now calculating the capital gain, indexation of which year be used i.e., wether i have to used index on each installment of same year.or used the index of year of down payment.
Example
Down Payment: 10,00,000 in FY 90-91
Ist Installment: 10,00,000 in FY 91-92
IIst Installment: 10,00,000 in FY 92-93
IIIst Installment: 10,00,000 in FY 93-94
IVst Installment: 10,00,000 in FY 94-95
Vst Installment: 10,00,000 in FY 95-96
Sale consideration : Rs. 2,00,00,000 in FY 2008-09
Index: FY 90-91=182, FY 91-92=199, FY 92-93=223, FY 93-94=244, FY 94-95=259, FY 95-96=281
Capital Gain
Sale consideration : Rs. 2,00,00,000
(-) Cost of aquistion
Down Payment: 10,00,000 X 582/182
Ist Installment: 10,00,000 X 582/199
IIst Installment: 10,00,000 X 582/223
IIIst Installment: 10,00,000 X 582/244
IVst Installment: 10,00,000 X 582/259
Vst Installment: 10,00,000 X 582/281
Total Cost 1,54,35,815
Long Term Capital Gain 45,64,185
ABOVE PROCEDURE IS TRUE OR NOT?
Provide me any case law regarding it, if u have?
I am facing the problem while computing the capital gain on house property.
PROBLEM
My client purchased house on 10 yearly installments. He took possesion in year of down payment. In current year he sold it. Now calculating the capital gain, indexation of which year be used i.e., wether i have to used index on each installment of same year.or used the index of year of down payment.
Example
Down Payment: 10,00,000 in FY 90-91
Ist Installment: 10,00,000 in FY 91-92
IIst Installment: 10,00,000 in FY 92-93
IIIst Installment: 10,00,000 in FY 93-94
IVst Installment: 10,00,000 in FY 94-95
Vst Installment: 10,00,000 in FY 95-96
Sale consideration : Rs. 2,00,00,000 in FY 2008-09
Index: FY 90-91=182, FY 91-92=199, FY 92-93=223, FY 93-94=244, FY 94-95=259, FY 95-96=281
Capital Gain
Sale consideration : Rs. 2,00,00,000
(-) Cost of aquistion
Down Payment: 10,00,000 X 582/182
Ist Installment: 10,00,000 X 582/199
IIst Installment: 10,00,000 X 582/223
IIIst Installment: 10,00,000 X 582/244
IVst Installment: 10,00,000 X 582/259
Vst Installment: 10,00,000 X 582/281
Total Cost 1,54,35,815
Long Term Capital Gain 45,64,185
ABOVE PROCEDURE IS TRUE OR NOT?
Provide me any case law regarding it, if u have?
13 March 2009
Dear Akashdeep,
Your calculation seems to be correct. didnt remember the case law, but to justify your solution you can read Section 55(2)with explanation (iii) to section 48. which states COA is the price which the assessee has paid, which assessee has incurred for acquisition.
and expalnation says that COA will be indexed in the year in which it was incurred.
Your calculation seems to be correct. didnt remember the case law, but to justify your solution you can read Section 55(2)with explanation (iii) to section 48. which states COA is the price which the assessee has paid, which assessee has incurred for acquisition.
and expalnation says that COA will be indexed in the year in which it was incurred.
14 March 2009
I respectfully differ from the above view. Pl read another opinion in https://www.taxworry.com/2008/09/which-date-booking-or-possession-or.html
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