Indexation in long term capital assets

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anuj (Querist)
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16 June 2009 Treatment of indexation in case of inheritence,gift. should we give the indexation from the period in which the previous owner acquires the capital asset or from the date when the capital assest is gifted to the date of sale.

Vipul J. Bhavsar

Vipul J. Bhavsar (Expert)
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16 June 2009 One must give the treatment for indexation incase of inheretance, gift from the date on which the asset is gifted till the date of sale.

CA.Nikhil Gupta

CA.Nikhil Gupta (Expert)
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16 June 2009 Vipul is correct

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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16 June 2009 For the purpose of indexation,in the cited query,cost inflation index for the first year in which the asset was held by the assessee or for the year beginning on 1/4/1981 whichever is later should be taken in the denominator. Ref:- explanation (iii) to section 48 of the Income tax Act,1961. However a contrary view is taken by Income tax Appellate Tribunal in a case reported in 89 ITD 1.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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19 June 2009 You can the indexation from the date the previous owner purchased the asset as held in the case of Pushpa Sofat V/s Calcutta ITAT.

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