Mrs. Seema Aggarwal, aged 56 years, a resident individual acquired a residential house at Ayodhya on 01.04.1993 for 45,00,000. The Fair market value…

CA Final · Direct Tax Laws and International Taxation · PYQS · May 2024
Mrs. Seema Aggarwal, aged 56 years, a resident individual acquired a residential house at Ayodhya on 01.04.1993 for 45,00,000. The Fair market value of the property as on 01.04.2001 was - 1,20,00,000 and the stamp duty value as on 01.04.2001 was - 1,02,00,000. Mrs. Seema Aggarwal sold her residential house located at Ayodhya to Mr. Shiv Kumar on 15.10.2023 for 15,50,00,000. The value determined by the Stamp Duty Authority on 15.10.2023 was - 17,00,00,000. Mr. Shiv Kumar was handed over the possession of the property on 15.10.2023 and the registration process was completed on the same date. He paid the sale proceeds in full on the date of registration. After recovering the sale proceeds from Shiv Kumar, Mrs. Seema Aggarwal purchased one residential plot at Amritsar for 8 crores on 18.02.2024. She also deposited 3 crores in a Saving account opened with State Bank of India, Amritsar under Capital gain account scheme on 31.03.2024 for the construction of the residential house on above plot. You are required to calculate the taxable capital gain in the hands of Mrs. Seema Aggarwal for the A.Y. 2024-25 as per the provisions of Income-tax Act, 1961. Cost Inflation Index for F.Y. 2001-02: 100 and 2023-24: 348.

Suggested Answer and Working Notes:

Computation of taxable Capital gain in the hands of Mrs. Seema Aggarwal for A.Y.2024-25 Particulars ₹ Full value of consideration As per section 50C, the full value of consideration would be actual sales consideration since the stamp duty value as on 15.10.2023 of 17,00,00,000 does not exceed 110% of actual consideration of 15,50,00,000. 15,50,00,000 Less: Indexed cost of acquisition [₹ 1,02,00,000 (higher of actual cost of 45,00,000 and Fair market value as on 1.4.2001 of 1,20,00,000, but restricted to stamp duty value as on 1.4.2001 of 1,02,00,000) x 348 / 100] 3,54,96,000 11,95,04,000 Less: Exemption under section 54 [Purchase of one residential plot of 8crores on 18.2.2024 and deposit of 3crores in Capital Gain Account Scheme on 31.3.2024 (before the date of filing of return of income) provided that the construction thereon is completed within the stipulated time of three years 2 , but restricted to maximum of 10crores] 10,00,00,000 Taxable long term capital gains 1,95,04,000 2 Vide Circular No. 667 dated 18.10.1993, the CBDT has clarified that the cost of the land is an integral part of the cost of the residential house, whether purchased or built.

Topics: Capital Gains

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