an individual purchased a property and paid down payment. later on surrender the title and the advance payment forfeited. what will be the treatment of amount forfeited ?
14 Replies
Sarath Rajendran
(Nil)
(2791 Points)
Replied 07 December 2017
it can ce adjusted with the cost of orginal property
Neha Mittal
(240 Points)
Replied 07 December 2017
I am asking from the point of view of Ind whose amount get forfieted
Divakar
(Student CA Final )
(11857 Points)
Replied 07 December 2017
No treatment for buyer... No capital loss or revenue loss is allowed under it act... It doesn't amount to relinquishment of right hence no capital loss
Neha Mittal
(240 Points)
Replied 07 December 2017
okie @ divakar..
so how it will be treated while preparing books of accounts
so how it will be treated while preparing books of accounts
Neha Mittal
(240 Points)
Replied 07 December 2017
I think may be it is dead loss
correct me if I'm wrong @ divakar
correct me if I'm wrong @ divakar
Divakar
(Student CA Final )
(11857 Points)
Replied 07 December 2017
Advance paid for commercial buildings and later it is forfeited it is not allowed as revenue loss
Divakar
(Student CA Final )
(11857 Points)
Replied 07 December 2017
Hmmm... Disallow in profit and loss account
Pushpraj
(student)
(186 Points)
Replied 07 December 2017
I am not sure Bt It will consider as like penalty for individual for breach of contract. And we don't get any benefits for penalties.
Divakar
(Student CA Final )
(11857 Points)
Replied 07 December 2017
here find treatment in the hands of buyer
Attached File : 1440160 20171207161419 screenshot 20171207 130632.pdf downloaded: 163 times
Neha Mittal
(240 Points)
Replied 07 December 2017
I m glad @ divakar u find but I already know this 😊
further my question is if it is neither revenue loss nor capital loss then what would be the exact treatment of it.?
further my question is if it is neither revenue loss nor capital loss then what would be the exact treatment of it.?
Divakar
(Student CA Final )
(11857 Points)
Replied 07 December 2017
Disallowed in pl ac... Already told.. Dead loss
Krishna Chaudhary
(Accountant)
(4531 Points)
Replied 07 December 2017
Amount Forfieted by Seller will be taxable under head income from other sources and no treatment or expenditure allowed in hands of buyer.
Recent Topics
- Experienced CA firm for accounting & auditing
- Regarding Perquisite Tax on ESOP - Unlisted Compan
- Casual Taxable Person under GST
- Extended Date of GSTR-1 for the month of July 2020
- NRO Interest - Taxed at source and in Foreign Coun
- Clarity needed on effective date
- Income Tax Refund Deadline Shortened to Five Years
- Rectification Applications for Past GST Demands
- GST Invoices Series
- FILING OF ITR AY 20-21
Related Threads
CAclubindia
