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Capital gain on property sale

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This query is : Resolved

Rajinder Kapoor (Querist)
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15 August 2020 Dear Sir

I had purchased a property in 1976. I sold this property in 2020. How do i calculate capital gain as CII is applicable from 2001. Do I need to hire approved valuer to calculate cost of property in 2001 ? Pl advise. Thanks

CA KARAN SINGH

CA KARAN SINGH (Expert)
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15 August 2020 Dear Mr. Rajinder Kapoor Ji
You can take the actual purchase price of the property in 1976 as the cost of the Capital asset as on 01/04/2001and then indexed accordingly to calculate capital gain.
Also, you can take Fair Market Value as on 01/04/2001 as the cost of Capital assets for purpose of Calculating capital gain. This required help of a registered valuer.

Advice: As per Income Tax Act, 1961, if the property is purchased before 01/04/2001, the Cost of Asset will be Original cost of Acquisition or Fair Market Value of 01/04/2001 at the option of assessee. After deciding Cost of Asset Index of 2001-02 will be taken for indexation purpose.

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