07 July 2010
if suppose i have taken advance against sale of a land.but due to dispute i did not sale land also forfeited the advance amount taken.and now i gift the assets to my daughter on the occasion of her marriage.what would be the treatment for amount i taken as a advance.plz let me know the about the tax ability of the same.
07 July 2010
Cost in this case will be calculated as per section 51.
51. Where any capital asset was on any previous occasion the subject of negotiations for its transfer, any advance or other money received and retained by the assessee in respect of such negotiations shall be deducted from the cost for which the asset was acquired or the written down value or the fair market value, as the case may be, in computing the cost of acquisition.
So the current cost - amount received in advance will become the cost in the hnads of ur daughter. Since u are gifting the property the same will not be treated as transfer and will not be liable for tax in ur hands.
Futher There has been a detailed discussion of the same here https://www.caclubindia.com/experts/gift-received-in-kind--422910.asp
08 July 2010
Read section 49 along with section 51 where it is stated in case of gift the cost the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it.
So in ur case the cost is the reduced cost and the same will be the cost in the hands of ur daughter also.
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