Gift Tax paid on Gifted Property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 February 2010 Dear Sir / all friends

Flat (immovable property) was received as Gift after payment of Gift Tax on Market value considered at the time of gift. Such property was sold by the gift receiver. I would like to know that What is the Cost of acquisition : 1) cost to previous owner or 2) Market Value considered for Gift Tax

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Second, I can treat the Gift Tax Paid as an Improvement cost for the purpose of calculation of Capital Gain.

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)
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22 February 2010 Here, not doubt that section 49(1) will be applicable,i.e., Cost of Acquisitoin will be COST TO PREVIOUS OWNER.

secondly, i think gift tax paid should be included in the Cost of Acquisition because it has been decided in one case that if any amount spend to secure/complete ownership title should be included in the COA only and here because without gift tax assessee was not able to acquire property properly, therefore it should be added in the value of COA only.

Regards!!!
Dinesh s. Adhikari

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