Indexation on Capital Gains

823 views 5 replies

Explanation iii of Section 48 of the ITA states that indexation is available from when the asset was first held by the assessee: For example: Mr. A got a Building as a gift from his father on say 01-04-2000, but his father had procured on say 01-04-1999, so the indexation benefit would be available from the year 2000, it is a funny position i.e. because the asset was gifted and he is allowed his fathers cost but the intermediate period is not available for indexation

 

(I agree in the case of Manjula Shah it has been stated that indexation is allowed from the date of holding of previous owner)

 

Now when we come to explanation iv it allows indexation from the year the improvement takes place, say in A's case the improvement took place in 01/04/1995, when his father was the owner, then he will be entitled to indexation from 1995..

 

Indeed a Funny Computation mechanism and after analyzing the chink also it has till date not been changed...

Replies (5)

Hi Sir,

You are calling it Funny........I wonder this as one of the grounds that turns the Manujala Shah case in favor of assesee.......:))

But yes at the end of the day one has to agree that these things should be taken care by Law itself rather than Courts..........

I am sure if u rectify ALL such cases from ITA then the thing which will remain will be called as "Direct Tax Code"

there are many loopholes in our tax act

but i dont think that Direct tax code is going to be a perfect one

Afterall Direct tax code will be a modified law in all respects good and bad too.

i mean the ambiguity will always remain there.

agree with amir

Amir,

 

Law has it own course and there is a lot to learn here and pretty interesting that in Majulala case the court called such interpretation illogical...

Dear sir,I think interpertion given by court is logical in Majulala case, which turn the things around. If we assume the conclusion of the case as a base then i think we can take indexation on improvement too from the date when it is held by previous owner.

pl clerify if i am wrong.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register