Mr A had brought house in 1995 at rs.6lakhs and sold on March 2025 . @ rs 1,50,00,000
However for capital gain purpose, we have 2 scheme, with and without indexation
But cost of acquisition I can take of F.M.v of that house as on 1-4-21 instead of 6 lakh
In indexation scheme i can use that f.m.v of flat multiply by cii of current year divide by cii of 2001 year
Plz advise
Background: - *Purchase Year*: The house was purchased in 1995 for ₹6 lakhs. -
*Sale Year*: The house was sold in March 2025 for ₹1,50,00,000. - *Capital Gain Calculation*: You're considering two schemes for capital gain calculation: with and without indexation.
Cost of Acquisition: - *Option 1: Actual Cost: You can use the actual cost of acquisition, which is ₹6 lakhs. -
Option 2: Fair Market Value (FMV)*: Alternatively, you can use the FMV of the house as on April 1, 2021, as the cost of acquisition. Indexation Scheme: -
*FMV as on April 1, 2021*: If you choose to use the FMV as on April 1, 2021, you can multiply it by the Cost Inflation Index (CII) of the current year (2025) and divide it by the CII of 2001. -
*CII Values*: You'll need to obtain the CII values for 2001 and 2025 to calculate the indexed cost of acquisition.
Recommendation: 1. *Calculate Both Options*: Calculate the capital gain using both options (actual cost and FMV with indexation) to determine which one is more beneficial.
2. *Consult a Tax Professional*: Consult a tax professional or chartered accountant to ensure accurate calculation and compliance with tax regulations.
3. *Maintain Documentation*: Maintain proper documentation, including proof of purchase, sale, and FMV valuation (if applicable).
Thanks sir
CAclubindia
