Can anyone plz explain the concept of Sec 51 ie Treatment of Advance Money recieved by the assesse?
1 Replies
CA Pallav Singhania
(IT System Auditor)
(33672 Points)
Replied 09 August 2013
Section 51 of the Income-tax Act, 1961 provides that any advance forfeitedby the seller of a property is deductible from the cost of the asset.
Theeffect of this provision is that subsequently when the same asset is sold,
a larger amount becomes taxable as capital gains in view of the original costbeing reduced to the extent of the amount forfeited.
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