1. Site Map
  2. Contact Us

  Capital Gains



CAPITAL GAINS



Cost Inflation Index for Capital Gain
Capital Gain Deduction
Capital Gain Calculator

Problem 1

Computation of capital gain of Mr. Ashwin for the A.Y. 2011-12

Particulars

Working

Details

Amount

Full Value of Consideration



3000000

Less : Expenses on transfer



Nil

Net sale consideration



3000000

Less : i) Indexed cost of acquisition

Rs.500000 * (711/100)

3555000


ii) Indexed cost of improvement


Nil

3555000

Long Term Capital Gain

(555000)

Note: Cost of acquisition shall be taken as cost of acquisition in the hands of owner (Rs.200000) or fair market value as on 1/4/81 (Rs.500000), whichever is higher.

 

Problem 2

Computation of capital gain of X for the A.Y. 2011-12

Particulars

Amount

Full Value of Consideration

496000

Less : Expenditure on transfer

Nil

Net sale consideration

496000

Less : Indexed cost of acquisition

16000

Less : Indexed cost of improvement

Nil

Long term capital gain

480000

Less : Exemption u/s 54EC

124000

Taxable Long term capital gain

356000

Note: Deduction u/s 54 shall not be available as the flat sold is not a residential house property.

 

Problem 3

Computation of capital gain of Mr. Sudhir for the A.Y. 2011-12

Particulars

Working

Details

Amount

Full Value of Consideration



5000000

Less : Expenses on transfer



50000

Net sale consideration



4950000

Less : i) Indexed cost of acquisition

Rs.500000 * 711/223

1504036


ii) Indexed cost of improvement

Rs.600000 * 711/259

1647104

3151140

Long Term Capital Gain

1798860

Less: Exemption u/s 54

1500000

Taxable Long Term Capital Gain

298860

 

Problem 4

Computation of capital gain of Mrs.X for the A.Y. 2011-12

Particulars

Working

Details

Amount

Full Value of Consideration



4150000

Less : Expenses on transfer



41500

Net sale consideration



4108500

Less : i) Indexed cost of acquisition

Rs.460000 * (711/140) 1

2336143


ii) Indexed cost of improvement

Rs.80000*(711/150)+Rs.26700*(711/161)

497111

2833254

Long Term Capital Gain

1275246

Notes

  1. Cost of acquisition shall be taken as cost of acquisition in the hands of the previous owner (Rs.26000) or fair market value as on 1/4/81 (Rs.460000), whichever is higher. However, indexation benefit shall be available from the year when assessee first held the property (i.e. 1986-87).
  2. Improvement expenditure incurred before 1/4/1981 is not considered.

 

Problem 5

Computation of capital gain of Richie for the A.Y. 2011-12

Particulars

Working

Details

Amount

Full Value of Consideration



1253000

Less : Expenses on transfer



3000

Net sale consideration



1250000

Less : i) Indexed cost of acquisition

Rs.70000 * (711/172)

289360


ii) Indexed cost of improvement


Nil

289360

Long Term Capital Gain

960640

Less : Exemption u/s 54F (Note)

384256

Taxable Long term capital gain

576384

Note: In both cases, he satisfies the conditions to get exemption u/s 54F. As the assessee has invested only Rs.100000 out of the sale consideration of Rs.250000, he will get proportionate deduction u/s 54F i.e. Rs.384256 (i.e.960640*500000/1250000).

 

Problem 6

Computation of capital gain of Ms. Vaishali for the A.Y. 2011-12

Particulars

Working

Details

Amount

Full Value of Consideration



1500000

Less : Expenses on transfer



30000

Net sale consideration



1470000

Less : i) Indexed cost of acquisition

Rs.150000 * 711/351

303846


ii) Indexed cost of improvement


Nil

303846

Long Term Capital Gain


1166154

Less: Exemption




U/s 54 (purchase of residential house)



700000

Taxable Long Term Capital Gain

466154

W.e.f. A.Y. 2007-08, deduction u/s 54EC is not available on investment in NABARD Bond.

 

Problem 7

Assessee has two alternative methods to compute his capital gain -

  • Alternate 1) Assessee claims benefit u/s 54
  • Alternate 2) Assessee does not claim benefit u/s 54.

Alternate 1) Assessee claims benefit u/s 54 : Computation of capital gain of Rajan for the A.Y. 2007-08

Particulars

Details

Amount

Full Value of Consideration


800000

Less : Expenditure on transfer


Nil

Net sale consideration


800000

Less : Indexed cost of acquisition

Rs.100000 * 519/244

212705

Less : Indexed cost of improvement


Nil

Long term capital gain

587295

Less : Exemption u/s 54

Assuming that Rs.587295 was deposited in Capital Gain Account Scheme

587295

Taxable Long Term Capital Gain

Nil

Computation of capital gain of Rajan for the A.Y. 2011-12

Particulars

Amount

Full Value of Consideration

800000

Less : Expenditure on transfer

Nil

Net sale consideration

800000

Less : Cost of acquisition (Rs.600000 Rs.587295)

12705

Less : Cost of improvement

Nil

Short Term Capital Gain

787295

Alternate 2) Assessee does not claim benefit u/s 54: Computation of capital gain of Rajan for A.Y. 2007-08

Particulars

Details

Amount

Full Value of Consideration


800000

Less : Expenditure on transfer


Nil

Net sale consideration


800000

Less : Indexed cost of acquisition

Rs.100000 * 519/244

212705

Less : Indexed cost of improvement


Nil

Long Term Capital Gain

587295

Computation of capital gain of Rajan for the A.Y. 2011-12

Particulars

Amount

Full Value of Consideration

800000

Less : Expenditure on transfer

Nil

Net sale consideration

800000

Less : Cost of acquisition

600000

Less : Cost of improvement

Nil

Short Term Capital Gain

200000

 

Problem 8

Where debenture are converted into shares

Conversion of debenture into shares is not treated as transfer u/s 47(x), hence not subject to capital gain. Cost of acquisition of debenture shall be treated as cost of share. However, period of holding of share shall not include period of holding of debentures.

Where debenture are redeemed

Redemption of debenture constitutes transfer, hence liable to tax and Rs.200000 [being 1000 * (Rs.1200 Rs.1000) is taxable. It is to be noted that indexation benefit is not available on debenture.


Problem 9

Computation of capital gain of Mr. X for the A.Y. 2011-12

Particulars

Details

Amount

Full value of consideration

 

2000000

Less : Expenses on transfer

 

Nil

Net sale consideration

 

2000000

Less : i) Cost of acquisition

600000

 

ii) Cost of improvement

300000

900000

Short Term Capital Gain

1100000

Exemption u/s 54 is not available in case of short term capital gain.

 

Computation of capital gain of Mr. X for the A.Y. 2012-13

Particulars

Details

Amount

Full value of consideration

 

900000

Less : Expenses on transfer

 

Nil

Net sale consideration

 

900000

Less : i) Cost of acquisition

200000

 

ii) Cost of improvement

250000

450000

Short Term Capital Gain

450000

 

Problem 10

Computation of capital gain of Mr. X for the A.Y. 2011-12

Particulars

Details

Amount

Full value of consideration

 

2000000

Less : Expenses on transfer

 

Nil

Net sale consideration

 

2000000

Less : i) Indexed Cost of acquisition [Rs.600000 * 711/519]

821965

 

ii) Indexed Cost of improvement [Rs.300000 * 711/711]

300000

1121965

Long Term Capital Gain

878035

Less : Deduction u/s 54 [Being cost of new house and amount deposited in C.G. Deposit Scheme]

450000

Taxable Long Term Capital Gain

428035

 

Computation of capital gain of Mr. X for the A.Y. 2012-13

Particulars

Details

Amount

Full value of consideration

 

900000

Less : Expenses on transfer

 

Nil

Net sale consideration

 

900000

Less : i) Cost of acquisition

Nil

 

ii) Cost of improvement

Nil

Nil

Short Term Capital Gain

900000