Entry of Property (Flat)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 August 2010 I had a flat which was sale by me in march'10
in my balance sheet Rs.225000/- was as asset of flat... now flat sold out for rs. 1400000/- means rs.1175000/- made profit. from which i have invested in rural capital gain bonds to take exemption from capital gain tax...& rs. 450000/- to my daughter as loan....
so what will be the effect of acccounts (how to show this transation in balance sheet) and what about tax.

VINOD ARORA

VINOD ARORA (Expert)
Follow

02 August 2010 Accounting entry may be passed by debiting bank account (14 Lac) and crediting asset account (2.25 lac) / profit on sale of assets (11.75 lac). Profit may be shown as credit to individual capital account.

Further accounting entry relating investments and loan to daughter in law also may shown in asset side appropriately,by crediting bank account.

According to indexed cost of aqui. and capital gain amts, sufficient investment in cap gain bonds should be made, to avoid any tax liability.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
Follow

02 August 2010 DEAR SIR,
THE PERSON IS NOT PROVIDING DETAILS OF DATE OF ACQUISTION OF PLOT, WITHOUT IT, HOW CAN WE ARRIVED INDEXED COST OF ACQ IS 7.81 LACS.

Upgrade to CAclubindia Pro. Subscribe Now!

Querist : Anonymous

Querist : Anonymous (Querist)

02 August 2010 thanxs both experts,
I want to know how do i entered amount on which head in balance sheet... pls help me to understand this matter. bcs my balance sheet do not tallied.

VINOD ARORA

VINOD ARORA (Expert)
Follow

02 August 2010 suppose you received 14 lacs, the same will go to bank account and exisiting asset of 2.25 lac will be eliminated. so your assets increased by 11.75 lacs, which will equal/coincide with increase in your capital base due to profit on sale of assets. This transaction do not bring any mismatch to your balance sheet.
second transaction of investment and third transaction of loan will increase asset side and reduce balance in bank account(aaset side) by corresponding amount. so again no mismatch.
hope the above clarifies.