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Capital Gain

Krishna (Manager - Genesis Tax Consultant) (531 Points)

26 January 2019

Dear Sir / Madam,

Mr "A" father of 4 sons, he bought the property for Rs 400000/- in 1979. Now the Market value of the property is 1 crore 54 Lakhs.

Mr "A" has spent Rs 30000/- and transferred his property on his Sons name as a settlement and Mentioned the Market value as 1 crore 54 lakh in the Registration document.

Now Sons decided to sell the property for Rs 1 crore 60 lakhs,

Please clarify me, what will be the Cost of this property to be calculated for Capital gain?

Whether intial purchase of Rs 400000/- to be consider or the settlement made to sons and Mentioned 1 crore 54 lakh to be consider as cost.

please clarify me in this regard.

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4 Replies

RAMAKRISHNAN R (INCOME TAX OFFICER) (1736 Points)
Replied 26 January 2019

cost to be reckoned from 01/04/2001

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Krishna (Manager - Genesis Tax Consultant) (531 Points)
Replied 26 January 2019

Thank you for the Information Sir!!!

MOHAMMED IMRAN (1020 Points)
Replied 26 January 2019

where the capital asset become the property of the assessee before 1-4-2001 COST OF ACQUISITION MEANS THE COST OF ACQUISITION OF THE ASSET TO THE ASSESSEE OR THE FAIR MARKET VALUE OF THE ASSET ON 1-4-2001 AT THE OPTION OF THE ASSESSEE (it is advisable, you can take higher value, which will reduce the tax liability)
- indexation benefit is available
- in the above case transfer from father to sons is NOT TREATED AS TRANSFER AS PER SECTION 47 OF INCOME TAX ACT, SO THE COST OF ACQUISITION OF FATHER IS TREATED AS COST OF ACQUISITION OF SONS

#for further information please reply

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