My query in this case is,
1) Which value will be capitalised in the books/balance sheet? Actual transaction price or the SDV?
2) Which value will be capitalised in the books if the SDV is more than transaction price?
2 Replies
Kapadia Pravin
(17259 Points)
Replied 16 February 2020
Agreement value added with incidental expenses will be capitalized as cost of acquisition.
However for tax purposes if SDV is more than 5% that is 105% or above of actual value then SDV will be considered as cost and difference will be taxable as income under income from other sources. (in buyer's hands). The said 105% will become 110% or above effective from 1-4-2020 (FY 2020-2021)
However for tax purposes if SDV is more than 5% that is 105% or above of actual value then SDV will be considered as cost and difference will be taxable as income under income from other sources. (in buyer's hands). The said 105% will become 110% or above effective from 1-4-2020 (FY 2020-2021)
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