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K. P.S 10 October 2019
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??
Suresh Thiyagarajan (Student) 11 October 2019
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.