Smt. Chitra Bhaskaran Vs ITO (ITAT Chennai)
Tax Payers should adhere to valid claims when reporting Long term Capital gain (LTCG) on sale of immovable property in their Income tax Return – A case study
1. Introduction:-
1.1 When a person sells immovable property, the transaction may result in either a profit or a loss. To determine this, two factors are necessary: the Selling Price and the Cost Price. In terms of income tax, the resulting profit or loss is referred to as capital gain or capital loss. This is calculated as the difference between the sale consideration of the property and its cost price, including any improvements made to it. According to Section 45(1) of the Income Tax Act, any profits or gains from the transfer of a capital asset in the previous year are subject to income tax under the “Capital gains” category, unless exceptions are specified in sections 54, 54B, 54D, 54E, 54EA, 54EB, 54F, 54G, and 54H. These gains are considered part of the income for the year in which the transfer occurred. Furthermore, if an immovable property has been held for more than 24 months, any gain or loss from its transfer is classified as Long Term Capital Gain (LTCG) or Long Term Capital Loss (LTCL), respectively.
