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Indexation rate

Tanvi Gupta (Job) (42 Points)

29 April 2012

If mr A purchased a property on 01.04.1981 for rs 200000 n gifted d same to mr.B on 01.04.1995 n mr b sell the prop. on 01.01.2010..now while calculating the indexed cost of acq. which yr rate will be taken in the denominator 1995 or 1981?????

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22 Replies

Arvind Sharma (ACA) (1432 Points)
Replied 29 April 2012

Indexation shall be from 1995-96 but period of holding shall be counted from 1981. (although in both cases, it will be Long Term)..

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CS RAJESH C.CHOUDHARY (ASSISTANT MANAGER) (14607 Points)
Replied 29 April 2012

AGREE WITH ARVIND SHARMA...

Anumanchipalli Sathikonda (Tax Consultant) (1559 Points)
Replied 29 April 2012

Ms.Tanvi Gupta

Please refer to Section 49(1)(ii) of Income-tax Act, 1961. I am hereunder reproducing the relevant portion of the section.

Section 49- Cost with reference to certain modes of acquisition.-

(1) Where the capital assesse became the propoerty of the assesee-

(i) --------

(ii) under a gift or will;

(iii)(a)---(b)---(c)---(d)--(e)--

(iv)---

the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be.

Explanation.- In this sub-section the expression "previous owner of the property" in relation to any capital asset owned by an assessee means the last previous owner of the capital asset who acquired it by a mode of acquisition other than that referred to in clause (i) clause (ii) or clause (iii) or clause (iv) of this sub-section.

Hope you have got the clarification.

Best Wishes

Sathikonda

sumit (CA final Student) (151 Points)
Replied 29 April 2012

the period of holding , from 1981

indexation from 95 onwards

and cost being taken to be the same as that of previous owner...:-)

Deep@k (----) (155 Points)
Replied 29 April 2012

agree with arvind sharma

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Tanvi Gupta (Job) (42 Points)
Replied 29 April 2012

but in vinod gupta sir mod.its d date of acq. by the previous owner....?

sumit (CA final Student) (151 Points)
Replied 29 April 2012

yes period of holding from previous owner only...i was wrong...i accept...:(

sumit (CA final Student) (151 Points)
Replied 29 April 2012

yes period of holding from previous owner only...i was wrong at index...i accept...:( and even indexation from 81...should be done...

CA Akshay Kumar Mishra (Chartered Accountant ) (1784 Points)
Replied 30 April 2012

in ur case for the purpose of indexation 1981-1982 rate shall be taken in the denominator

Peter Sequeira (*) (81 Points)
Replied 30 April 2012

Period of holding shall be taken from 1980-81. however indexation shall be done form the year in which the assesse got the property i.e.1995-96

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Mihir Doshi (B.Com, CA, CS, LLB) (2187 Points)
Replied 30 April 2012

Indexation 1995

Period of Holding considered from 1981

Long term Capital Asset

Ashok J (CA Final) (880 Points)
Replied 30 April 2012

If you go as per the definition of indexation, its 1995.......However there is a 2011 Mumbai HC judgment (i think Manjula Shah) which says it should be 1981.......