Mr. Pawan (a resident) purchased Gold Jewellery worth - 5,60,000 during the FY 05-06. During the FY 11-12, he further purchased gold jewellery worth…

CA Final · Direct Tax Laws and International Taxation · PYQS · May 2026
Mr. Pawan (a resident) purchased Gold Jewellery worth - 5,60,000 during the FY 05-06. During the FY 11-12, he further purchased gold jewellery worth - 7,80,000. All the jewellery was sold by him on 15th May 2025. The Jewellery purchased in FY 05-06 was sold for 21,00,000 and that purchased in FY 11-12 was also sold for 21,00,000. He purchased a Residential House of 25,90,000 on 25th Dec. 2025. He owns only one residential house as on 15th May 2025. Compute the income chargeable under the head Capital Gains in accordance with the provisions of the Income-tax Act, 1961, considering the most beneficial treatment permissible to Mr. Pawan under the Act. CII for relevant Previous Year: 2005-06: 117, 2011-12: 184, 2025-26:376

Suggested Answer and Working Notes:

Computation of Income chargeable under the head “Capital Gains” in the hands of Mr. Pawan Particulars (₹) (₹) On sale of Gold Jewellery purchased in F.Y. 2005-06 Full value of consideration 21,00,000 Less: Cost of acquisition 5,60,000 15,40,000 Less: Exemption u/s 54F in respect of purchase of residential house within 2 years after the date of transfer [₹ 15,40,000 x 21,00,000 / 21,00,000] 15,40,000 Long term capital gains [Since asset held for more than 24 months] Nil On sale of Gold Jewellery purchased in F.Y. 2011-12 Full value of consideration 21,00,000 Less: Cost of acquisition 7,80,000 13,20,000 Less: Exemption u/s 54F in respect of purchase of residential house within 2 years after the date of transfer [₹ 13,20,000 x 4,90,000 (25,90,000 - 21,00,000) / 21,00,000] 3,08,000 Long term capital gains [Since asset held for more than 24 months] 10,12,000 Capital gains chargeable to tax 10,12,000

Topics: Capital Gains

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