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Budget 2017- Capital gains

Budget - By: - CA DEV KUMAR KOTHARI - Dated:- 14-2-2017 Last Replied Date:- 21-2-2017 - : Cut-off date for option to take fair market value as on 01.04.2001 - FMV as on 01.04.2011 would be better. Option to consider fair market value - general discussion: The subject matter is very well known and a popular provision. A person who has sold a long-term capital asset which was acquired before cut-off date has an option to substitute fair market value of such asset as on cut-off date and then apply .....

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for computation of allowable total indexed cost. This situation may not be applicable in case of laded properties, however, in case of many assets like shares actual cost may be higher than fair market value as on cut -off date. So one should be careful while deciding whether to opt for fair market value or not. Furthermore, for each capital asset, acquired before cut-off date, assessee has option separately for each capital asset or lot of each capital asset, so care shuld be taken to compare a .....

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04.1974 to 01.04.1981. We find time lag between cut-off dates of 10 years for three dates and then seven years. Whereas last amendment was made to provide cut-off date (01.04.1981) which was 12 years back from the initial revised assessment year 1993-94. Now date is proposed to be revised to 01.04.2001 that is having long twenty years gap. The first assessment year will be 2018-19 therefore the time gap in initial year and cut-off date is of eighteen years. Though amendment is very late, but whe .....

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1st day of April, 2001 shall be substituted. Notes on Clauses: Clause 24 of the Bill seeks to amend section 48 of the Income-tax Act relating to mode of computation. Further, under the existing provisions of the said section, indexed cost of acquisition is defined to be an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the year in which the asset is transferred bears to the Cost Inflation Index for the first year in which the asset was held by the a .....

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(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. Notes on Clauses: Clause 28 of the Bill seeks to amend section 55 of the Income-tax Act relating to .....

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so as to advance the aforesaid cut-off date to 1st day of April, 2001. Where the long-term capital asset has been acquired before the 1st day of April, 2001, then, the cost of acquisition will be taken to be the value of the asset as on the 1st day of April, 2001. Similarly, in such cases the cost of improvement will be taken to be the cost of improvement after this date. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2 .....

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ril 2001 , or as on any later date, for and up to the previous year ending 31-3-2007, requiring to be indexed in accordance with the last Notified Table, shall have to be taken at the so indexed cost . If so, the question of embarking on any fresh or separate exercise for ascertaining the asset value does not arise. Any contrary view will be tantamount to rewriting the entire scheme of the extant law, with a retrospective consequence, Sooner the matter is clarified by the Revenue, better; so as .....

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n, choose to attempt and throw more light, to the best of personal ability /capability:As regards the historical changes narrated in the write-up, the last change, as said, was made in 1992.For a better understanding thereof, refer the write-up @http://www.charteredclub.com/cost-inflation-index/ ; also,http://www.incometaxindia.gov.in/Budgets%20and%20Bills/1992/107010000000353211.pdf - the Explanation of contextual relevance herein, may be found under the paragraph titled, - Restructuring Capita .....

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red before the 1st day of April, 1981 is taken to be THE COST OF ACQUISITION TO THE ASSESSEE OR THE FAIR MARKET VALUE OF THE ASSET ON THAT DATE, AT THE OPTION OF THE ASSESSEE. As regards the change of base year as proposed in the 2017 Budget, however, it is differently provided: THE COST OF ACQUISITION WILL BE TAKEN TO BE THE VALUE OF THE ASSET AS ON THE 1ST DAY OF APRIL, 2001 (FONT supplied for special noting)What calls for a special attention is that, contrary to the view shared in certain lim .....

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