What will be the cost of acquisition

Tax queries 1152 views 3 replies

CA. Anubhav Jaggi

104 Points Joined February 2008

Hello freinds.

Kindly tell me that what will be the Cost of Acquisition in case of property, which is purchased in installment?

A property is booked with a builder when construction was going on. Several payments were made in installments which were as under:

1999 33568 Booking done

2000 50352

2001 41960

2002 41960

2002 84547

2003 41960

2003 125880

2003 43764 Possesion granted

Penalty payments

2008 2655

2009 550

2010 2140

No registration till now.

Asset to be sold in 2010 after registration. There will be some registration and stamp duty charges.

My question is :

1. What will be the cost of acquisition in this case? or Method of calculation of COA?

2. Should we take indexation? if yes, from which year?

3. Is there any improvement involved?

4. Will it be treated as transfer of right or actual transfer?

5. Any other issue involved in your opinion?

Replies (3)

vishnupriya

CA Final

1418 Points Joined July 2009

From the year 1999 onwards indexed cost of acquisition is calculated seperately for each year's installments. Penalty payments can be included in the installments for calculating COA.

If the property is transfered after resgistration, it is actual transfer.

daya shankar singh

CA CS

629 Points Joined March 2010

1) the COA calculated on the date of possession i.e. 2003

2) U will get indexation from the year 2003

3) NO improvement involved

4) Actual transfer

5) No other issue involved

CA. Anubhav Jaggi

104 Points Joined February 2008

But if we take indexation each year, the condition of 3 years which is necessary for applying indexation in Long term capital asset will not be satisfied.

I think indexation should not be on yearly basis with each payment.

Kindly suggest some other trearment.