nikhil.r.gondhalekar (articled assistant) (64 Points)
25 February 2010Q-
If father died in 82-83. without creating will.land is inherited from forfathers & no acqusition can be traced back.can it be said that since no COA can be determined.so comparision between COA &FV of 81 is not possible and S.55 deeming provision fails .
IF No,whether sons are taxed as AOP or individual??
How computation is to be made???
which is more beneficial- 54EC 1)NHAI OR REL BONDS OR 54F
Please Advise.
C.Balaji
(Learner)
(1867 Points)
Replied 25 February 2010
Dear Nikhil........
According to me..... Cost of Acquistion will be FMV on 1.4.81......
Cost of Acquisition of Previous owner........It relates back to the fore father who acquired the Land........
They will be taxed as Individuals..............They will be taxed separately as individuals ( acc. to Ratio/share)...........
They can go for both 54 EC and 54 F...............both are beneficial.........(which is required for them)........
But waiting for others to reply........
shushantsinghal
(BCOM(HONS),C.A)
(283 Points)
Replied 25 February 2010
in such case u can take the value of property as on 1.4.1981 by approved valuer.......and such value as value provided to u by valuer will be cost of acquistion
Amir
(Learner)
(4016 Points)
Replied 25 February 2010
Dear Nikhil,
It cannot be said that Sec 55 fails just becos u don't have any record of the cost of acquisition.
Friend, had this been the case then it would have been so easy to defeat the provision every one would burn the documents regarding cost of acquisition so that capital gain cannot be computed...:)
Further Sec 55 says that assessee has the option to take FMV as on 1.4.81 as the COA, I mean law has never said that these 2 things to be compared its just that an assessee would exercise this option only when its beneficial to him.
Further Sec 55(3) says -
Where the cost for which the previous owner acquired the property cannot be ascertained, the cost of acquisition to the previous owner means the fair market value on the date on which the capital asset became the property of the previous owner.
Taxabilty will be in the form of AOP or Individual will depend upon the fact of inheritance, who has inherited the property.
I woud say better option would be to create a HUF then transfer this property to that HUF & then dispose it...... clubbing provisions are not attracted in case of inherited properties. Further u can also be saved from being assessed as AOP......exemption limit of Rs. 1.60 lacs can also be utilized..........
54 EC V/s 54F -
1) Both can be utilized simuntaneously.
2) 54EC - Limit upto 50 Lacs
- Interest received on Bonds will be taxable
- Investment is to bemade in 6 months
3) 54 F - New House, if let out rent will be taxable
- If self occupied then exemption in respect of 1 house can be claimed
- Time limit of investment is upto 2yearsif purchased (or 3 years if constructed)
)
nikhil.r.gondhalekar
(articled assistant)
(64 Points)
Replied 01 March 2010
Thanx for Reply,
Amir Sir,
I never meant acqusition can not be traced back means records are lost,to be very specific, the land was awarded to forefathers by earstwhile ruler of India. if that can be established COA can not be compared with FMV .As per Sec 55(3)
"Where the cost for which the previous owner acquired the property cannot be ascertained, the cost of acquisition to the previous owner means the fair market value on the date on which the capital asset became the property of the previous owner".
In my case even previous owner has inherited property,The fact that 55(3) is focusing on COA to previous owner intention is to find COA & If it Fails ,do we have to always fall back on FMV of 81.
Please consider above & advise.
IF sons & daughters are distributed sale proceeds in % as per current law on inherited property so taxability is on AOP or Individual??
SInce Cash outflow in 54EC(Capital gain)<54F(net consideration)purely on this front 54EC is beneficial??
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