Capital Gains Questions

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com)

1
Income from Capital Gains
FCA Ranjeet Kunwar
Question 1:

Mr. Shiv Subscribed 1,000 shares @ ` 120 each on 15-11-2007. One bonus share for every two shares
held, are allotted on 20-08-2012. All shares are sold for ` 390 each on 15-07-2013. Brokerage paid 0.5%.
Shares are non-listed.

Answer:
Computation of taxable capital gain

Assesse: Mr. Shiv TY: 2013-2014 AY: 2014-2015

Capital asset: 1000 Original shares [Financial Asset]
Period of Holding: 15-11-2007 to 15-07-2013 (LT)
Particulars Amount (Rs)
Sales consideration 3, 90,000
Less:-Indexed Cost of Acquisition (2,04,501)
(120000/551*939)
Less:-Indexed Cost of Improvement NIL
Less:-Cost of Transfer (1,950)
Long Term Capital Gain 1,83,549
Computation of taxable Capital Gain
Assesse: Mr.Shiv TY: 2013-2014 AY: 2014-2015
Capital asset: 500 bonus shares [Financial Asset]
Period of Holding: 20-08-2012 to 15-07-2013 (ST)
Particulars Amount (`)
Less: - Cost of Acquisition nil
Less:-Cost of Transfer (975)
STCG 1, 94,025

Question 2:

Suppose shares are listed in NSE and STT is paid at the time of sale 0.1 % on transaction value.

Answer:

If shares are listed and STT is paid; then LTCG is exempt u/s 10(38); and STCG will be taxable @ 15%
under section 111A.

Question 3:
Mr. Narayan acquired a Building for ` 1,20,000 on 05-01-1976. He paid Brokerage ` 5,000 and Stamp
duty ` 30,000 at the time of purchased. The cost of improvements are incurred as under:

GAAP BRIGHT; (gaapbright.com; 011-41404111; www.taxgururanjeetkunwar.com)

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FCA Ranjeet Kunwar
` 90,000 on 02-01-1980
` 1,50,000 on 23-12-1987
` 2,40,000 on 01-07-1991.

On 12-12-2013, building is sold for ` 55,00,000. Brokerage paid ` 50,000 at the time of sale. Compute
taxable capital gains in the hand of Mr. Narayan. FMV as on 01-04-1981 ` 1,40,000

Answer:

Assesse: Mr. Narayan TY: 2013-2014 AY: 2014-2015
Capital asset: Building [Non-Financial Asset]
Period of Holding: 05-01-1976 to 12-12-2013 [LT]
COA: [Asset acquired before 1-04-81]:-higher of actual cost (1, 55,000) or FMV as on 1-04-81 (1,
40,000) i.e. 1, 55,000
(155000 100 X 939)
Less:-Indexed Cost of Improvement
Before 1-04-1981= ignored

During 87-88
(150000 150 X 939) (9,39,000)
During 91-92
(2, 40,000 199 X 939) (11,32,462)

Less:-Cost of Transfer (50, 000)
LTCG 19,23,088

Question 4:

Mr. Jay (non-resident) purchases shares of D Ltd. an Indian company by remitting US $.
Cost of acquisition (10,000 shares) ` 4,50,000
Date of acquisition 10-12-2007
6,000 shares are sold on 02-08-2013 for ` 80 each.
Brokerage paid ` 2/- per share at the time of transfer.
Compute taxable capital gain. Exchange rates are as under:

Date Bid rate Ask rate
On 10-12-2007 43.50/- 44.20/-
On 02-08-2013 49.60/- 50.90/-


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FCA Ranjeet Kunwar
Answer:
[By applying 1
st
proviso to section 48]
Computation of Taxable Capital Gain
Assesse: Mr. Jay (NR) TY: 2013-2014 AY: 2014-2015
Capital Asset: - 6000 shares (FA)
POH: 10-12-2007 TO 02-08-2013 (LT)

Particulars Amount (`) Rate Amount($)
Sales consideration 4, 80,000 50.25 9552.24
Less: - COA 2,70,000 43.85 (6157.35)
Less: -COT 12,000 50.25 (238.81)
LTCG in ($) 3156.08

LTCG in (Rs) = 3156.08 X 49.60 = Rs1,56,542

Question 5:

Mr. Nath purchased route permits on 03-03-1978 for ` 50,000. The FMV of route permits on 01-04-1981
was ` 1,30,000. The same is sold by him on 02-11-2013 for ` 14,00,000. Compute taxable capital gains.

Answer:

Assesse: Mr. Nath TY: 2013-2014 AY: 2014-2015
Capital asset: route permits [Non-Financial Asset]
Period of Holding: 03-03-1978 to 02-11-2013 (LT)
Less:-Indexed Cost of Acquisition (4, 69,500)
50,000
939
100

Less:-Indexed Cost of Improvement nil
Less:-Cost of Transfer nil
__________
LTCG 9,30,500

Question 6:

Mr. Davidas acquired a building for ` 3,40,000 on 20-09-1988. Cost of improvement of ` 5,00,000 was
incurred during the year 2001-02. The building is destroyed by fire on 20-09-2010. Building was insured
and therefore insurance compensation of ` 40 lacs is received by Devidas on 09-09-2013. Compute
taxable capital gains.


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FCA Ranjeet Kunwar
Answer:
Computation of taxable Capital Gain on receipt of
Insurance compensation by virtue of section45 (1A)

Assesse: Mr. Devi Das TY: 10-11 AY: 2014-2015
Period of Holding: 20-09-1988 to 20-09-2010[LT]

3,40,000/161*711
Less:-Indexed Cost of Improvement (8,34,507)
500000/426*711
_________
LTCG 16,64,002

Question 7:
Mr. Ram and Gopi are the partners of M/S RG & Co. Mr. Ram transferred his personal building to Firm as
his capital contribution on 12-12-2013. The FMV of Building at the time of transfer ` 30 lacs. However
Rams capital a/c is credited by ` 28 lacs. The building was acquired by Mr. Ram for ` 12,00,000 on 02-
02-2007. Compute taxable capital gains.

Answer:

Assesse: Mr. Ram TY: 2013-2014 AY: 2014-2015

Book Value of asset shall be taken as Sales Consideration [by virtue of section 45(3)]

Less:-Indexed Cost of Acquisition

12,00,000
939
519
(21, 71,098)
Less:-Indexed Cost of Improvement nil
Less:-Cost of Transfer nil

LTCG 6, 28,902


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FCA Ranjeet Kunwar
Question 8:

M/S RGM & Co. AOPs having three members R, G, and M. Mr. G is retired from AOPs on 12-11-13 and
to settle his account balance a piece of land is transferred by AOPs. The FMV of Land at the time of
transferred is Rs. 25,00,000. However Gs capital a/c is debited by Rs. 20,00,000. The Land was acquired
by AOPs on 09-08-2001 for Rs. 8,00,000. Compute taxable capital gains.

Answer:

Assesse: M/s RGM & Co (AOP) TY: 2013-2014 AY: 2014-2015
Capital asset: Land [Non-Financial Asset]
FMV of asset shall be taken as Sale Consideration [by virtue of section 45(4)]
(800000/426*939)
Less:-Indexed Cost of Improvement NIL
Less:-Cost of Transfer NIL
LTCG 7,36,620

Question 9:

Mr. Surya sold his house for ` 49,00,000 on 20-12-2013 which was acquired by him by way of Gift from
his father on 09-10-2002 on the occasion of his 25
th
birthday. His father acquired the said house for `
12,00,000 on 02-09-1997. The costs of improvement on house are incurred as under:

` 2,00,000 by his father on 09-08-2001.

` 3,00,000 by him on 10-02-2008.

Brokerage of ` 40,000 was paid by his father at the time of purchased and ` 60,000 is paid by him at the
time of sale. Compute taxable capital gains in the hand of Mr. Surya and his father.

Answer:

1. No capital gain is required to compute in the hand of Suryas father since the transaction of gift is not
treated as transfer u/s 47.


Assesse: Surya TY: 2013-2014 AY: 2014-2015
Capital asset: house [Non-Financial Asset]
COA u/s 49(1): COA for Surya = COA of previous owner i.e. 12, 40,000


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FCA Ranjeet Kunwar
12,40,000/331*939
Less:-Indexed Cost of Improvement

During2001-2002
200000/426*939 (4,40,845)

During 2007-2008
300000/551*939 (5,11,252)

Less:-Cost of Transfer (60,000)
LTCG 3,70,199

Question 10:-
Balance Sheets of Gopi Ltd. as on 31-03-2013
(Rs. in lakhs)

Paid up capital
Reserves and surplus
Liabilities
division I
division II
division III
Rs.
2000
700

60
180
210
Fixed Assets
Division I
Division II
Division III
Other Assets
Division I
Division II
Division III
Rs.
260
370
660

690
550
620

On 20-08-13 the Division III has been transferred by Gopi Ltd. under slump sale for Rs. 1200 lakhs. You
are required to compute capital gains with the help of following additional information:-

(i) The value of fixed assets of Div. III includes a Land of Rs. 90 lakhs and balance is the WDV as per
books of accounts. However WDV as per u/s 43(6) under the Income tax act is Rs. 520 lakhs.

(ii) The land which is included in the value of fixed assets is purchased at Rs. 50 lakhs in year 2000.
(Rs. 90 lakhs is revalued figure).

(iii) Other assets of Division III represent Book Value of non-depreciable assets (i.e. Debtors, stock
cash etc.)

(iv) Division III is in existence since March 2009.

Answer:
Computation of Taxable Capital Gains
(By applying section 50B)

Assessee:- Gopi Ltd. (Company) Transfer Year: 2013-14 AY 2014-15

Capital Asset:- Division III (Non-financial Asset)

POH :- March 2009 to 20-08-13 (LT)


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FCA Ranjeet Kunwar
Sale Consideration (Lump Sum) 1200 Lakhs
Less: Cost of Acquistion (W.N. 1) (980 Lakhs)
Long-term Capital gains 220 Lakhs

Working note 1: Calculation of Net-Worth

Value of Assets
Depreciable Fixed Asset 520 Lakhs
Non-Depreciable Asset (Land) 50 Lakhs
Other Assets 620 Lakhs
Value of Total Asset 1190
Less: Value of Liabilities (210)

Net Worth 980 Lakhs

Question 11:
Mr. Rajveer sold a house to his friend Mr. Viraaj on 1
st
November, 2013 for a consideration of ` 26,00,000. The Sub-Registrar refused
to register the document for the said value, as according to him, stamp duty had to be paid on ` 54,00,000. Mr. Rajveer preferred an
appeal to the Valuation Officer, who fixed the value of the house as ` 35,00,000 (` 20,00,000 for land and the balance for building
portion). The differential stamp duty was paid, accepting the said value determined. Assuming that the fair market value is `
40,00,000, what are the tax implications in the hands of Mr. Rajveer and Mr. Viraaj for the assessment year 2014-15? Mr. Rajveer had
purchased the land on 1
st
June, 2010 for ` 5,20,000 and completed the construction of house on 1
st
October, 2011 for ` 12,00,000.

Answer:

Actual Sales Consideration 26 Lakhs
Stamp Duty Value 54 Lakhs
Valuation Officers Value 35 Lakhs
As per section 50C, ` 35 Lakhs shall be taken as Sales Consideration.
For Land ` 20 Lakhs
For Building ` 15 Lakhs
In the hand of Rajveer
1. Capital Asset: Land (Non-financial asset)
Period of holding 01-06-10 to 01-11-13 (LT)
Sales Consideration under section 50C 20,00,000
Less: Indexed Cost of Acquisition (6,86,751)

Long-term Capital Gains 13,13,249

2. Capital Asset:- Building (Non- financial asset)
Period of holding 01-10-11 to 01-11-13 (ST)

Sales Consideration under section 50C 15,00,000
Less: Cost of Acquisition (12,00,000)

Short-term Capital Gains + 3,00,000


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FCA Ranjeet Kunwar
In the hand of Viraaj

1. As per section 56(2)(vii), where any immovable property is acquired for the consideration below the Stamp Duty Value or Value
assessed by Valuation Officer, as the case may be, the benefit upon acquisition will be taxable as IFOS, if it exceeds ` 50,000.

Value assessed by Valuation officer ` 35,00,000
Less: Purchase price of Immovable property (26,00,000)
Benefit upon acquisition (IFOS) 9,00,000

2. Further section 49(4) provides, where the benefit upon acquisition of immovable property is taxable as IFOS, the value as assessed
by Valuation officer will become the cost of acquisition in the hand of buyer.

3. Therefore ` 35,00,000 will be the cost of acquisition in the hand of Mr. Viraaj.

Question 12:

Mr. Mahesh sold his residential house on 10-09-2013 for ` 38,00,000. It was acquired by him on 08-04-2008 for `
9,45,000. Brokerage is paid 0.50% at the time of sale. Stamp duty was paid at the time of acquisition ` 45,000. Mahesh
purchases new residential house on 01-07-2014 for the purpose of availing exemption for ` 20,00,000 at Pune. Compute
taxable capital gains.

Answer:
COMPUTATION OF TAXABLE CAPITAL GAINS
Assessee: Mr. Mahesh Transfer Year: 2013-14 Assessment Year: 2014-15
Capital Asset: Residential House (Non-Financial Asset)
Period of holding: 08-04-2008 to 10-09-2013 (Long-term)

Sales Consideration 38,00,000
Less: Indexed Cost of Acquisition
9,90,000
939
582

(15,97,268)
Less: Cost of Transfer (19,000)
Income from LTCG 21,83,732
Less: Exemption u/s 54
Purchase of new Residential House

(20,00,000)
Taxable LTCG 1,83,732
Question 13:
Mr. Harish sold his residential house on 13-11-2013 for ` 65,00,000. However Valuation as per Stamp Duty Authority has
been fixed ` 70,00,000. It was acquired by him by way of will from his father on 08-05-2008. His father had acquired the
same for ` 5,45,000 on 05-06-1999. Brokerage is paid 0.50% by Harish at the time of sale. Mr. Harish deposits `
52,00,000 in CGDS on 31-07-2014. (Due date for filing ITR is 31-07-2014). He acquires new residential house for `
40,00,000 by withdrawing amount from CGDS on 20-09-2015. Compute taxable capital gains.

Assessee: Mr. Harish Transfer Year: 2013-14 Assessment Year: 2014-15
Period of holding (taken from previous owner): 05-06-1999 to 13-11-2013 (Long-term)
Cost of Acquisition by virtue of section 49(1) : Cost to the previous owner; ` 5,45,000
Sale Consideration by virtue of section 50C:- Higher of actual or Stamp Duty Value; ` 70,00,000


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FCA Ranjeet Kunwar

5,45,000
939
389

(13,15,566)
Less: Cost of Transfer (0.5% of actual sales consideration) (32,500)
Amount deposited in CGDS within due date of ITR

(52,00,000)

CONSEQUENCE OF UNUSED AMOUNT OF CGDS

Unutilized amount in CGDS will be taxable as LTCG for the year in which three years has been expired from the date of
transfer.

Assessment Year 2017-18 (next following the year in which 3 years expired)

Amount Deposited in CGDS in respect of which exemption u/s 54 was claimed 52,00,000
Less: Amount utilized to acquired new residential house (40,00,000)

Question 14:
Mr. Ramesh sold his residential house on 16-12-2013 for ` 46,00,000. It was acquired by him on 28-06-2006 for `
12,40,000. Cost of Improvement of ` 1,29,000 was incurred during the year 2007-08. Brokerage of ` 32,000 is paid at the
time of sale. Mr. Ramesh deposits ` 25,00,000 in CGDS on 15-07-2014. (Due date for filing ITR is 31-07-2014). He
acquires new residential house for ` 18,00,000 by withdrawing amount from CGDS on 20-09-2015. Further he constructs
additional floor on newly acquired residential house for ` 2,50,000 on 01-05-2016.Compute taxable capital gains.

Assessee: Mr. Ramesh Transfer Year: 2013-14 Assessment Year: 2014-15

12,40,000
939
519

(22,43,468)
Less: Indexed Cost of Improvement
1,29,000
939
551

(2,19,838)


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FCA Ranjeet Kunwar
(restricted to amount of LTCG)

(21,04,694)
Taxable LTCG NIL


transfer.


Less: Amount utilized to acquired new residential house
Less: Amount utilized in construction of additional floor
(18,00,000)
(2,50,000)

Question 15:

Mr. Kartik sold his residential house on 15-10-2013 for ` 42,85,000. It was acquired by him on 18-09-2008 for `
5,55,000. Brokerage is paid 0.50% at the time of sale. Stamp duty was paid at the time of acquisition ` 45,000. Kartik
purchases new residential house on 01-11-2012 for the purpose of availing exemption for ` 25,00,000 at Jaipur. However
the new residential house is sold for ` 39,00,000 on 12-05-2015. Brokerage paid ` 12,000 at the time of such sale.
Compute taxable capital gains for AY 2014-15 and AY 2016-17.

Answer:
Assessee: Mr. Kartik Transfer Year: 2013-14 Assessment Year: 2014-15

6,00,000
939
582

(9,68,041)
Purchase of new Residential House

(25,00,000)


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FCA Ranjeet Kunwar
CONSEQUENCE OF NEW RESIDENTIAL HOUSE SOLD WITHIN THREE YEARS

1. To continue exemption, assessee must promise that he will not sell new residential house within three years from the
date of acquisition of new house.

2. If new house is sold within three years, while computing capital gains on such transfer, the cost of acquisition of
new residential house shall be reduced by the amount of exemption availed earlier.

Assessment Year 2016-17
Capital Asset: New Residential house (NFA)
Period of holding: 01-11-2012 to 12-05-2015 (Short-term)

Sale Consideration of new residential house 39,00,000
Less: Cost of Acquisition
Actual Cost 25,00,000
Less: Amount of exemption availed earlier (25,00,000)
Less: Cost of Transfer

(NIL)
(12,000)
Taxable STCG 38,88,000

Question 16:

Mr. Shivram sold his urban agricultural land on 20-06-2013 for ` 16,00,000. The land was acquired by him on 20-11-2010
for ` 9,06,000. Brokerage is paid 0.50% at the time of sale. Shivram purchases New agricultural Land in urban area on 15-
11-2013 for the purpose of availing exemption for ` 11,26,000. However the New agricultural Land is sold for ` 19,00,000
on 12-05-2015. Brokerage paid ` 5,000 at the time of such sale. Compute taxable capital gains for AY 2014-15 and AY
2016-17.
Assessee: Mr. Shivram Transfer Year: 2013-14 Assessment Year: 2014-15
Capital Asset: Urban Agricultural Land (Non-Financial Asset)


(9,06,000)
Income from STCG 6,86,000
Less: Exemption u/s 54B
Purchase of Urban Agricultural Land
(restricted to amount of Capital gains)

(6,86,000)
Taxable STCG NIL


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FCA Ranjeet Kunwar
CONSEQUENCE OF NEW URBAN AGRICULTURAL LAND SOLD WITHIN THREE YEARS

1. To continue exemption, assessee must promise that he will not sell new Urban Agricultural Land within three years
from the date of acquisition.

2. If new capital asset is sold within three years, while computing capital gains on such transfer, the cost of acquisition of
urban agricultural land shall be reduced by the amount of exemption availed earlier.

Assessment Year 2016-17

Capital Asset: Urban Agricultural Land (NFA)

Sale Consideration of Urban Agricultural Land 19,00,000
Actual Cost 11,26,000
Less: Amount of exemption availed earlier (6,86,000)
Less: Cost of Transfer

(4,40,000)
(5,000)
Taxable STCG 14,55,000

Question 17:

R&Co. Partnership Firm sold its Land for ` 89,00,000 on 12-12-13. However value assessable as per Stamp Duty Authority
is ` 96,00,000. The Land was acquired by Firm on 10-09-2003 for ` 23,00,000. Brokerage of ` 43,000 is paid at the time
of sale.

Firm subscribed Bond of NHAI for ` 40,00,000 on 17-06-2014 to avail exemption u/s 54EC. Compute taxable capital gains.

Assessee: R&Co. Firm Transfer Year: 2013-14 Assessment Year: 2014-15
Capital Asset: Land (Non-Financial Asset)
Sale Consideration by virtue of section 50C:- Higher of actual or Stamp Duty Value; ` 96,00,000

23,00,000
939
463

(46,64,458)

Less: Exemption u/s 54EC
(since it has been subscribed after 6 months)

Not allowed


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FCA Ranjeet Kunwar
Question 18:

Suppose in previous example bonds are subscribed on 09-05-2014.

23,00,000
939
463

(46,64,458)


(40,00,000)

Question 19:

Mr. Raghunath sold his residential house on 03-10-2013 for ` 64,00,000. It was acquired by him for ` 15,40,000 on 05-
06-2002. Brokerage is paid 0.50% by at the time of sale. Mr. Raghunath subscribed debentures of RECL of ` 3,50,000 on
30-01-2014 and deposits ` 25,00,000 in CGDS on 01-07-2014. (Due date for filing ITR is 31-07-2014). He acquires new
residential house for ` 21,00,000 by withdrawing amount from CGDS on 20-09-2015. Compute taxable capital gains.

Answer:
Assessee: Mr. Harish Transfer Year: 2013-14 Assessment Year: 2014-15

15,40,000
939
447

(32,35,034)
Less: Cost of Transfer (0.5% of actual sales consideration) (32,000)
Amount of Debentures of RECL

(25,00,000)

(3,50,000)


transfer.



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FCA Ranjeet Kunwar
Less: Amount utilized to acquired new residential house (21,00,000)

Question 20:

Mr. Harikishan sold his Urban Agricultural Land on 12-10-13 for ` 62,00,000, which was acquired by him for ` 12,00,000
on 14-05-1999. To avail exemption, he acquired two Agricultural Land. One is situated in rural area which is acquired for `
5,00,000 on 12-07-2014 and another is situated in urban area which is acquired for ` 13,50,000 on 30-07-2014. The new
Rural Agricultural Land is sold on 13-09-2015 for ` 6,90,000. Compute taxable capital gain for AY 2014-15 and AY 2016-
17.

Answer:
Assessee: Mr. Harikishan Transfer Year: 2013-14 Assessment Year: 2014-15
Capital Asset: Urban Agricultural Land (Non-Financial Asset)

12,00,000
939
389

(28,96,658)
Less: Exemption u/s 54B
Purchase of Rural Agricultural Land
Purchase of Urban Agricultural Land

(5,00,000)
(13,50,000)


CONSEQUENCE OF NEW URBAN AGRICULTURAL LAND SOLD WITHIN THREE YEARS

1. To continue exemption, assessee must promise that he will not sell new Urban Agricultural Land within three years
from the date of acquisition.

2. In the given question assessee has sold rural agricultural land, hence there is no default committed by assessee.

Taxable capital gains for Assessment Year 2016-17 Nil

Question 21:

Mrs. Ruchika Sold Jewellery for ` 42,00,000 on 12-02-2014. Jewellery was acquired by him on 14-12-2001 for
`14,09,000. Cost of transfer is 0.25%. She deposits ` 25,00,000 into CGDS account on 15-06-2014 to avail exemption.
Compute taxable capital gains for Assessment Year 2014-15.


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FCA Ranjeet Kunwar
Assessee: Mrs. Ruchika Transfer Year: 2013-14 Assessment Year: 2014-15
Capital Asset: Jewellery (Non-Financial Asset)

14,09,000
939
426

(31,05,754)
Less: Cost of Transfer (0.25% of Sales consideration) (10,500)
Less: Exemption u/s 54F
Investment amount = ` 25 lakhs deposited in CGDS
25,00,000
10,83,746
41,89,500

(6,46,704)


Question 22:

Mrs. Girija Sold commercial building for ` 83,00,000 on 16-01-2014. Building was acquired by him on 19-06-2001 for `
29,10,000. Brokerage of ` 12,000 has been paid at the time of acquisition and @ 0.50% at the time sale. She purchase
new residential house for ` 52,00,000 on 20-01-2013. She has already one residential house before newly purchase. She
also subscribes bonds worth ` 2,50,000 of NHAI on 14-05-2014. Compute taxable capital gains for Assessment Year
2014-15.

Assessee: Mrs. Girija Transfer Year: 2013-14 Assessment Year: 2014-15
Capital Asset: Commercial Building (Non-Financial Asset)

29,22,000
939
426

(64,40,746)
Less: Cost of Transfer (0.50% of Sales consideration) (41,500)
Less: Exemption u/s 54F
Investment amount = ` 25 lakhs deposited in CGDS
52,00,000
18,17,754
82,58,500

Subscribed bond of NHAI

(11,44,557)

(2,50,000)


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FCA Ranjeet Kunwar
Question 23:

Mr. Ravikant sold following assets during the financial asset 2013-14:

Jewellery Residential House
Sales consideration 12,00,000 25,00,000
Indexed Cost of Acquisition 3,60,000 18,25,568
Cost of transfer 0.50% 12,000

To avail exemption Mr. Ravikant acquires new residential house for ` 18,00,000 on 05-07-2014. Compute taxable Capital
gains.

Assessee: Mr. Ravikant Transfer Year: 2013-14 Assessment Year: 2014-15

Particulars Jewellery Residential House
Nature of Capital gains Long-term Long-term
Sales consideration ` 12,00,000 ` 25,00,000
Less: Indexed Cost of Acquisition (3,60,000) (18,25,568)
Less: Cost of Transfer (6,000) (12,000)
Long-term Capital gains 8,34,000 6,62,432
Less: Exemption (regarding purchase of Residential house)
Exemption u/s 54
Exemption u/s 54F
11,37,568
8,34,000
11,94,000

N.A.

(7,94,583)

(6,62,432)

N.A.
Taxable LTCG 39,417 Nil

Allocation of Amount of Investment regarding Exemption

Total amount of investment in Residential House ` 18,00,000
Less: Investment utilized under section 54 (to the extent LTCG) (6,62,432)
Balance Investment to be utilized under section 54F 11,37,568

Question 24:
Mrs. Malini Hari shifted her industrial undertaking located in corporation limits of Faridabad, to a Special
Economic Zone (SEZ) on 1.12.2013:

The following particulars are available: `
(a) Land: Purchased on 20.01.2009 4,26,000
Sold for 22,00,000
(b) Building [Construction completed on 14.03.2011]
WDV of building as on 01.04.2013 8,20,000
Sold for 11,39,000
(c) WDV of cars as on 01.04.2013 7,40,000
Sold for 6,00,000


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FCA Ranjeet Kunwar
(d) Expenses on shifting the undertaking 1,15,000
(e) Assets acquired for the undertaking in the SEZ (on or before 25.06.2014):
(i) Land 3,00,000
(ii) Building 5,00,000
(iii) Computers 1,00,000
(iv) Car 4,20,000
(v) Machinery (Second hand) 2,00,000
(vi) Furniture 50,000

There is no intention of investing in any other asset in this undertaking.
Compute the exemption available under section 54GA for the assessment year 2014-15.

Answer:
54GA [urban to SEZ]
ST/LT for land/Building, plant and machinery.

Computation of Capital Gain
Capital Asset: Land

Sales consideration 22,00,000
Less: Indexed Cost of Acquisition 4,26,000X852/551 6,58,715
LTCG 15,41,285

Computation of capital gain
Capital Asset: Building

Less: W.D.V 8,20,000
STCG 3,19,000

Computation of capital gain
Capital Asset: Plants Car
Less: W.D.V 7,40,000
STCG (1,40,000)

Net STCG 1,79,000
LTCG 15,41,285
17,20,285
Exemption
Land 3,00,000
Building 5,00,000
Plant
Computer 1,00,000
Machine 4,20,000
Shifting expenses 1,15,000 16,35,000
Taxable 85,285

Furniture not allowed

There is no restriction regarding purchase of second hand machinery.

Capital Gains Questions

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