In the realm of property taxation, a crucial issue has surfaced regarding the Cost of Acquisition for assets bought before April 1, 2001. This determination affects the calculation of capital gains and tax obligations.
The Income Tax Department has brought a clarification in this regard via X handle as follows -
New Capital Gains Taxation regime
An issue has been raised as to what would be the Cost of Acquisition as on 1.4.2001 for properties purchased prior to 2001.
For properties (land or building or both) purchased prior to 1.4.2001, the cost of acquisition as on 1.4.2001 shall be:-
- Cost of Acquisition of the asset to the assessee; or
- The Fair Market Value (not exceeding the stamp duty value, wherever available) of such asset as on 1.4.2001.
Taxpayers can choose either option as per section 55(2)(b) of the Income-tax Act, 1961.
An illustration to explain the same
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