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Please help me solve this problem-capital gains

CA girl (Article Trainee-CA Final) (1942 Points)

17 August 2013

Raghav sold gold ornaments on 16-7-2012 for a sum of Rs.10 lakhs, The gold was purchased in 1978 for Rs.60000 by his father.The fair market value of the gold as on 1-4-1981 was Rs. 1 lakh. His father gifted the gold to Raghav on 15-7-12.

He spent Rs. 2 lakhs till 31-7-13 on construction of house property
Deposited Rs. 5 Lakhs on 31-7-12 in capiltal gains accounts scheme
Spent rs. 4 lakhs on construction of house property till the stipulated time.

Compute the capital gains for various relevant assessment years.

Please help me solve this problem.

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3 Replies

CA Kumar Mukesh (CA CMA FINAL and Advance Excel Trainer) (6881 Points)
Replied 17 August 2013

Computation of Capital gain for AY 2013-14

Full Value Consideration	1000000
less: Cost of Acquisition
100000*1222/100	852000

long Term Capital Gain	148000
Less Deduction u/s 54F
Investment in House property	29600
Capital gain A/c Scheme	400000
Net long Term Capital Gain	0

Tranfer made by father to his son covered by Section 49

Please also read conditions attached with section 54F

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CA Pallav Singhania (IT System Auditor) (33362 Points)
Replied 17 August 2013

Sale Consideration: 10,00,000

Less: 100000

Cost of Acquisition

(as the father gifted his ornaments to his son on 12-13

so no indexation will be available)

LTCG: 900000

Less: Exemption 54 400000

Less:Exemption CG Scheme 500000

Capital gain NIL

ess: Cost of Acquisition

Read more at: /forum/please-help-me-solve-this-problem-capital-gains-261690.asp#.Ug9Do1NCmho

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CA Kumar Mukesh (CA CMA FINAL and Advance Excel Trainer) (6881 Points)
Replied 17 August 2013

Originally posted by : Aryan Singhania (Pallav)
	Sale Consideration: 10,00,000 Less: 100000 Cost of Acquisition (as the father gifted his ornaments to his son on 12-13 so no indexation will be available) LTCG: 900000 Less: Exemption 54 400000 Less:Exemption CG Scheme 500000 Capital gain NIL ess: Cost of Acquisition Read more at: /forum/please-help-me-solve-this-problem-capital-gains-261690.asp#.Ug9Do1NCmho

Deduction under Section 54 will not applicable here since capital asset (gold ornaments) in not residential house property

But Section 54F cover this this transaction & Exemption under this section is 29,600 (148000/1000000*200000) (Amt of Capital gain/Net Consideration Received*Amt invested in New house proprty)