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Cost of the transferred asset

06 August 2018

I received a gift of plot of land from my father, which was their stock in trade. What will be its cost valuation when I sell such plot of land?

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5 Replies

Pranjali (intern) (2216 Points)
Replied 06 August 2018

It should be transferred at the cost price.

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Jinesh Jain (3 Points)
Replied 06 August 2018

Current cost price or cost price to the previous owner?

Pranjali (intern) (2216 Points)
Replied 06 August 2018

The cost price on the date of transfer

Preksha Bhatt (CA.Student) (290 Points)
Replied 06 August 2018

cost to previous owner

Manish Ghiria (CA ) (42 Points)
Replied 06 August 2018

There are two different transaction.

1. Conversion of stock into capital asset- The difference between the value as on date of conversion minus the purchase price of the stock will be charged in the hands of the father as business income.

2. Sale of asset inherited- The transfer of land will not be taxed in the hands of the son. When the land is sold the cost of acqusition will be the cost of land as on the date of transfer.

The land mentioned here is non agricultural land.