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Capital Gain

CA Ayush Agarwal (Kolkata-Pune-Mumbai) (27186 Points)

22 April 2010

Hello to Every One !!!!!

Please Clarify My Doubt That

If I Have Land (Property) in My File Since I am Filling Return (Say 25-26 Years)......& in Balance Sheet Amount Shown Rs. 5000/-

& This Land Purchased B4 01/04/1981

Now I Want To Sold This Land Amounted to Rs. 10,00,000/-

Now I Want to Know

Weather Calculation Made Through That 10,00,000 - 5000 = 9,95,000/- & Pay LTCG Without Indextation @ 10% i.e 99500/-

or I Have Option to Make Valuation i.e Fair Market Value as on 01/04/1981 now for selling.

From Valuation Officer.

I Mean Now Indextation Can Be Done for FMV as on 01/04/1981

& Then See Weather Do Index or Not.

& If Valuar Do The Valuation The How Much Fees He Will Take (Apprx)

Which Option Will Be The Best For Saving Tax.

Thanks.

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6 Replies

Ratan Deep Saxena (Asstt Manager (Accounts & Finance)) (2998 Points)
Replied 22 April 2010

Dear Ayush,

As per my opinion u should go for indexation, coz it will reduce your tax liability too. Moreever u cn't move for valuation officer as per your own. Reference to valuation officer can be made only where A.O. has reason to believe that value of property is shown below the FMV.

regards,

ratan

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Amir (Learner) (4016 Points)
Replied 22 April 2010

Dear Ayush,

Option to tax LTCG @ 10% without indexation is available only in following cases -

"listed securities or unit or zero coupon bond"

Now, "land" is not there so question itself is defective...........:))

1 Like

CA Ayush Agarwal (Kolkata-Pune-Mumbai) (27186 Points)
Replied 22 April 2010

Originally posted by : Amir
	Dear Ayush, Option to tax LTCG @ 10% without indexation is available only in following cases - "listed securities or unit or zero coupon bond" Now, "land" is not there so question itself is defective...........:))

Oh.....

Ya.ya..............U R Rite Amir..

Its 20% Only & Indextation to be done........

But Now There is Written That FMV on 01/04/1981 or book value which ever is higher is asse is acquired Before 01/04/1981.......

then how can i know the fair market value as on 01/04/1981

Bimal Thacker (Proprietor) (762 Points)
Replied 22 April 2010

Dear Ayush

Yes, you can approach to valuer for value of property as on 1981. You have got a better chance for tax planning. If there is high value of property as on 1981 the ITO can not referred to valuation officer for low valuation. They may take for valuation fees from 1000 to 5000.

It is not necessary to approach to valuear, however for safer side you can do that.

CA Ayush Agarwal (Kolkata-Pune-Mumbai) (27186 Points)
Replied 23 April 2010

Originally posted by : Bimal Thacker
	Dear Ayush Yes, you can approach to valuer for value of property as on 1981. You have got a better chance for tax planning. If there is high value of property as on 1981 the ITO can not referred to valuation officer for low valuation. They may take for valuation fees from 1000 to 5000. It is not necessary to approach to valuear, however for safer side you can do that.

But in Budget 2009, There was Amendment in Section 50C, About Valuation Officer...That Now Valuation Will Not Be Done

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Bimal Thacker (Proprietor) (762 Points)
Replied 23 April 2010

Section 50C comes into play when the value of property transfer is less then the value adopted or assessed by stamp duty valuation authority. In such case the stamp duty valuation shell be adopted. However if assessee objects to this valuation, then AO may make a reference to the valuation officer and the value determined by the DVO shell be deemed to be the full value of consideration subject however that the value determined by DVO does not exceed the stamp duty valuation.

However if it is higher then the value adopted or assessed by stamp duty valuation authority, then section 50C does not come into picture.

In your case if you take value of 1981 higher then the section 50C doesnot come in picture, as Section 50C comes into play when the value of property transfer is less then the value adopted or assessed by stamp duty valuation authority