AAYUSH BANSAL (ca aspirant) (92 Points)
27 March 2010friends i have a problem pls help...
mr. A purchased a house on 1-4-09 for rs 1,00,000 on 11-11-09 he forfeited 10,000 from B... on 1-1-2010 he gifted this house to his son C .. on 1-2-2010 C forfeited 10,000 from D... on 1-3-2010 he sold to E for rs 2,00,000...
what is the tax implication for A and C...
Shailesh
(CA Final)
(127 Points)
Replied 27 March 2010
As there is no sale in respect of A, Hence in hand of A nothing will be taxable. For C, Cost of aquisition of house will be same as for previous owner, i.e. Rs. 1,00,000/- As per section 51, If any advance money is forfeited by assessee himself then that money upto extent of cost will be deducted from cost. Balance amount if any will be treated as COA. and then Capital gain will be computed.
In respect of C, Capital Gain :-
Sales Consideration Rs. 2,00,000
less : COA Rs. 90,000 [1,00,000-10,000(forfeited by C)]
-------------------------
Capital Gain Rs. 1,10,000
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