Queries in capital gains
This query is : Resolved
12 September 2008
QUERY NO 1
Case1: A capital asset (non financial asset) purchased on 1-4-1999 is sold on 30-8-2007. An improvement was made to that asset on 1-4-2003.It is sure that the transfer results in long term capital gains and indexation benifit can be taken for calculating cost of acquisition and cost of improvement.
Case2: If the improvement to the capital asset in case1 above is made on 1-4-2006,we can claim indexation benifit on cost of acquisition. But can we claim indexation benifit on improvement made to the asset ??? Pls explain with reasons.
(My doubt is that in case2, the gap between date of improvement and date of transfer is less than 36 months (17 months in this case) and it is not apt to claim indexation benifit on improvement made to the asset)
QUERY NO 2
Can indexation benifit be claimed on cost of improvement incurred by previous owner mentioned in sec 49(1) ?
QUERY NO 3
An assessee forfeits a sum of Rs.5 lacs on account of failure on part of buyer of the capital asset. Later the assessee sells that capital asset whose cost of acqiusition is Rs.3 lacs. At the time of such transfer the assessee adjusts the forfeited money received with cost of acquisition of the asset and a balance of Rs.2 lacs is left.
Should it be added to Sale consideration or treated as capital receipt ??
QUERY NO 4
In above query3 , if it is assumed that the transfer results in long term capital gain, should the cost of acquisition be first indexed and then adjusted with forfeited money received OR
Should the forfeited money received is first adjusted with cost of acquisition and balance amount of cost of the asset (if any) is then indexed
Case1: A capital asset (non financial asset) purchased on 1-4-1999 is sold on 30-8-2007. An improvement was made to that asset on 1-4-2003.It is sure that the transfer results in long term capital gains and indexation benifit can be taken for calculating cost of acquisition and cost of improvement.
Case2: If the improvement to the capital asset in case1 above is made on 1-4-2006,we can claim indexation benifit on cost of acquisition. But can we claim indexation benifit on improvement made to the asset ??? Pls explain with reasons.
(My doubt is that in case2, the gap between date of improvement and date of transfer is less than 36 months (17 months in this case) and it is not apt to claim indexation benifit on improvement made to the asset)
QUERY NO 2
Can indexation benifit be claimed on cost of improvement incurred by previous owner mentioned in sec 49(1) ?
QUERY NO 3
An assessee forfeits a sum of Rs.5 lacs on account of failure on part of buyer of the capital asset. Later the assessee sells that capital asset whose cost of acqiusition is Rs.3 lacs. At the time of such transfer the assessee adjusts the forfeited money received with cost of acquisition of the asset and a balance of Rs.2 lacs is left.
Should it be added to Sale consideration or treated as capital receipt ??
QUERY NO 4
In above query3 , if it is assumed that the transfer results in long term capital gain, should the cost of acquisition be first indexed and then adjusted with forfeited money received OR
Should the forfeited money received is first adjusted with cost of acquisition and balance amount of cost of the asset (if any) is then indexed
12 September 2008
querry 1- Benefit of indexation on improvent will be available
querry 2- Yes
Querry 3-Capital Receipt
Querry 4- First reduced the amount from cost, then cost of acquisiton is indexed
querry 2- Yes
Querry 3-Capital Receipt
Querry 4- First reduced the amount from cost, then cost of acquisiton is indexed
12 September 2008
Thanks for ur reply ..
But it would b still better if u would hv given replies with any supporting sections and case law references
But it would b still better if u would hv given replies with any supporting sections and case law references
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