Mr X on a plot of land and 500 years in an Indian company during the p...
Calculation of Capital Gains
To determine the profit chargeable to tax for Mr. X during the assessment year 2021-2022, we will calculate the capital gains from the sale of both the land and shares.
1. Sale of Land
- Acquisition Cost: Rs. 4,00,000 (July 2011)
- Sale Price: Rs. 6,50,000 (December 2020)
- CII for 2011-12: 184
- CII for 2020-21: 301
- Indexed Cost of Acquisition:
- Formula: (CII of Sale Year / CII of Purchase Year) x Cost of Acquisition
- Calculation: (301 / 184) x 4,00,000 = Rs. 6,54,348.91 (rounded to Rs. 6,54,349)
- Capital Gain on Land:
- Sale Price - Indexed Cost of Acquisition
- Calculation: 6,50,000 - 6,54,349 = Rs. -4,349 (Loss)
2. Sale of Shares
- Acquisition Cost: Rs. 4,50,000 (April 5, 2020)
- Sale Price: Rs. 4,00,000 (December 2020)
- CII for 2020-21: 301
- Indexed Cost of Acquisition:
- (301 / 301) x 4,50,000 = Rs. 4,50,000
- Capital Gain on Shares:
- Sale Price - Indexed Cost of Acquisition
- Calculation: 4,00,000 - 4,50,000 = Rs. -50,000 (Loss)
3. Summary of Capital Gains
- Total Capital Gains:
- Loss from Land: Rs. 4,349
- Loss from Shares: Rs. 50,000
- Overall Loss: Rs. 54,349
Conclusion
Mr. X has a total capital loss of Rs. 54,349 for the assessment year 2021-2022, which can be carried forward to offset future capital gains.