Please Help: Long term capital gain
Posted Date : 12-Sep-2011 , 10:54:42 am | Posted By: Darshit Shah
Category :
Income Tax | Answers :
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I purchased my office in the year 2001 and made 100% payment in that year.however the sale deed was executed in the year 2008 so now should I take indexation of 2001 or 2008? |
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Answers:
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 Answer by: Ashish Karundia |
| Dear Darshit,
Here you should take the indexation of 2001 as Section 2(47) of Income Tax Act, 1961 provides that transfer in relation to a capital asset, includes any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882). Further, Explanation to Section 48 of Income Tax Act, 1961 provides that ‘indexed cost of acquisition’ means 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 assessee or for the year beginning on the 1st day of April, 1981, whichever is later.
You can refer the judgment of CIT vs Mormasji Mancharji Vaid (250 ITR 542) delivered by the full bench of Gujarat High Court.
Hope this answers your query.
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| Answer by: Ketan Samdani |
| Indexation should be taken from the date when you got the possession. Execution of sale deed is secondary matter and the deciding factor for indexation will be possession by assessee.
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