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Capital gains
Whether advance received in transfer of capital asset should be reduced r no???
Replies (7)
Dear K P S
kindly eloborate on facts of the case
kindly eloborate on facts of the case
Any advance received by you from buyer of property is to towards consideration of sale of capital asset only.
Obviously the buyer will pay the balance amount only.
Where is the problem in this ??
Obviously the buyer will pay the balance amount only.
Where is the problem in this ??
Ex: if iam selling my house property for 10l and the is ready nd he paid advance of 50k, nd the bal he was unable to pay so forfeited,, now iam gng to sell the same house to another party now whether I must reduce 50k in sale price r no??
50000/- forfeited amount will reduce your cost of house property and that reduced cost of house property will be considered as and when you sale house property
There will be any indexcation for that 50000
1. Receipt of advance money forfeited is dealt in sec 56(2)(ix), where the amount received towards sale of the capital asset and subsequently got forfeited then the same will be subject to tax under the head Income from other sources in the year of receipt.
2. As per sec 51, if the advance amount is already taxed then the same will not go down to decrease the cost of acquisition at the time of sale of the property.
3. In your case, Rs. 50,000 received will be taxable in the year of receipt as IOS. Once, you have paid tax on the same, again it need not be reduced from your cost of acquisition.
Please correct me if the above solution has an alternative view.
Suresh ji
You are right. I stand corrected.
You are right. I stand corrected.
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