11 April 2011
XYZ was a non resident till 2004. There after he is assessed in India as a resident. He has a property in UK which he has leased out for rent and paid tax on the rental income till date in India. Now he wants to sell this property which was purchased in 1988. Queries -1) Will he get indexation benefit on sale of this property. 2) The cost of the property purchased in UK Pounds at that time is UK pounds 1,00,000/= What will be the cost of this in terms of foreign exchange rates. Will the cost be at the conversion rates of 1989 or as on date of selling? Thanks.
11 April 2011
1) You will get the benefit of indexation. 2) first, you have to calculate the capital gain in pounds today and then you have to convert the said capital gain in rupees on the date of sale or on the date of receiving money from the purchaser.
CAclubindia
