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Section 49(4) and 49(1)

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Akash A

100 Points Posted on 12 April 2023

About 6 years ago, no tax was paid under section 56(2)X on gifted capital asset received worth 2.7 Lacs. Now my question is whether cost of acquisition be NIL as per sec 49(4) since no tax was paid under 56(2)X that time OR will it be 2.7 Lacs as per sec 49(1)?

Replies (3)

Quick Summary

This discussion clarifies the cost of acquisition for capital gains tax purposes when a gift is received. Specifically, it addresses whether Section 49(4) applies, making the cost NIL due to no tax paid under Section 56(2)(x) at the time of receipt, or if Section 49(1) dictates the cost should be the market value of the gift (in this case, £2.7 Lacs). The consensus leans towards the cost being NIL if the gift was from a non-relative and Section 56(2)(x) tax was not applicable at the time.