Shifting base year from 1981 to 2001 for computation of capital gains
The existing provisions of section 55 provide that for computation of capital gains, an assessee shall be allowed deduction for cost of acquisition of the asset and also cost of improvement, if any. However, for computing capital gains in respect of an asset acquired before 01 .04.1981, the assessee has been allowed an option of either to take the fair market value of the asset as on 01 .04.1981 or the actual cost of the asset as cost of acquisition. The assessee is also allowed to claim deduction for cost of improvement incurred after 01 .04.1981, if any.
As the base year for computation of capital gains has become more than three decades old, assessees are facing genuine difficulties in computing the capital gains in respect of a capital asset, especially immovable property acquired before 01 .04.1981 due to non-availability of relevant information for computation of fair market value of such asset as on 01 .04.1981.
In order to revise the base year for computation of capital gains, it is proposed to amend section 55 of the Act so as to provide that the cost of acquisition of an asset acquired before 01.04.2001 shall be allowed to be taken as fair market value as on 1st April, 2001 and the cost of improvement shall include only those capital expenses which are incurred after 01.04.2001.
Consequential amendment is also proposed in section 48 so as to align the provisions relating to cost inflation index to the proposed base year.
These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-19 and subsequent years.
[Clauses 28 & 24]
Extract of relevant clause from Finance Bill, 2017
Amendment of section 55.
28. In section 55 of the Income-tax Act, with effect from the 1st day of April, 2018,—
(A) in sub-section (1), in clause (b), in sub-clause (2), in item (i), for the figures, letters and words “1st day of April, 1981”, the figures, letters and words “1st day of April, 2001” shall be substituted;
(B) in sub-section (2), in clause (b), for the figures, letters and words “1st day of April, 1981” wherever they occur, the figures, letters and words “1st day of April, 2001” shall be substituted.
Amendment of section 48.
24. In section 48 of the Income-tax Act, with effect from the 1st day of April, 2018,—
(a) in the fifth proviso, for the word “subscribed”, the word “held” shall be substituted;
(b) in the Explanation, in clause (iii), for the figures, letters and words “1st day of April, 1981”, the figures, letters and words “1st day of April, 2001” shall be substituted.
I have purchased a property in 1989 for Rs. 22.71 Lacs. As per this amendment I have obtained a valuation report of this property by registered valuer and as per the report the FMV as on 2001 of Rs. 74 Lacs and the value as per DLC rate of state government is Rs 30 Lacs. As per my balance sheet value of this property as on 2001 was 25 Lacs. Cost of Improvement after 2001 is 45 lacs done during multiple years till date. now I have decided to sell the property for Rs 2.91 Cr. My questions are
1. what would be my cost of acquisition in 2001
2. what would be my long term capital gain/loss in 2024.
I have purchased a property in 1989 for Rs. 22.71 Lacs. As per this amendment I have obtained a valuation report of this property by registered valuer and as per the report the FMV as on 2001 of Rs. 74 Lacs and the value as per DLC rate of state government is Rs 30 Lacs. As per my balance sheet value of this property as on 2001 was 25 Lacs. Cost of Improvement after 2001 is 45 lacs done during multiple years till date. now I have decided to sell the property for Rs 2.91 Cr. My questions are
1. what would be my cost of acquisition in 2001
2. what would be my long term capital gain/loss in 2024.
I want to Know how i calculate purchase cost of propety purchase on 83-84 for indexation
Either i calculate by valuer or taking redy reconer rate as on 01.04.2001
What will be the Indexed Cost of Acquisition of property(Residential Plot) purchased in F.Y.1983-84 & going to be sold in current F.Y.2023-24? Will you please let me know? What will be the FMV of this property (4500 Sq.Ft.) in/on 1st April 2001?
How to read your reply for my query dated: 7th August,2023. I am unable to see your reply. Please let me know.
I BOUGHT LAND FOR 60000 IN 1994 AND CONSTRUCTED A SHOP ON THAT LAND,I SOLD THAT SHOP FOR 50LAC IN 2023 WHAT WILL BE THE CAPITAL GAIN?
how to calculate fair market value on 1.4.2001 of a property bought for 6 lakhs in 1992
How to calculate cost of a property built in 1938-39 on 01 Apr 2001
Purchased flat in Oct. 1988 for Rs.2.06 Lacs & sold in Feb. 2021 for Rs.101.00 lac. What will be Capital gain considering change in base year to 2001.
Residential flat in coop society purchased in 1987 Rs.97125 and sold in jan2020 Rs 38 lakhs what will be capital gain /tax.
Iइयर acquired a residential plot at Rs 5000/ in finacial year 1987-88, and sold out at Rs 20 Lakh in the financial year 2020- 21(I.e. in the month of September 2020, Then how much will be Long term capital gain & how much will be Income tax,i wii have to pay
A PLOT is acquired at the year 1988 at Rs 5000/- and sale in financial year 2020-21,
Then how much will be Long Term Capital gain .and Income tax over it, i have to pay
Plot in1982 bought for 2250
Sold in Nov 2019 at rs 10 lakh to brother
But its ready reckoner price is 45 lakh.
What is tax for this?
i hv a query.does cost of improvement include cost incurred to keep away encroachers of vacant plot like building compound wall hut for chowkidar wages of chowkidar etc