Capital Gain on House Property
This query is : Resolved
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
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
- Refund Annexure-B
- Liable to deduct tds and 44ADA
- Sale of Equity shares for Purchase of Residential Property
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- ECO SUPPLY REPORTIONG IN GSTR-1
- Is Interest applicable for payment made through credit ledger vide DRC03 for FY 2020-21 & 2021-22
- CCFS 2026 Schemed
- Subscription paid to foreign customer
- Two seprate Invoice needed
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
