Special Economic Zone - Taxation | Income Tax for assessment (Inter Level) PDF Download

There is no intention of investing in any other asset in this undertaking. Compute capital gain.

Ans: 69,994

Assignment

P1R: X owns a residential house which is self-occupied and also a house plot. He sells the house on January 31, 2017 and the house plot on February 15, 2017 for Rs 9,00,000 and Rs 5,00,000, respectively. The house was purchased on January 15, 2008 for Rs 4,00,000 and the plot on March 31, 2008 for Rs 2,00,000. X has purchased a new residential house on April 25, 2016 for Rs 5,00,000. Compute the income chargeable under the head “capital gains” for the AY 2017-18.

Ans: 15,270.

P2: Mr. ‘X’ furnishes the following data for the previous year ending 31-3-2017 :

(a) Preference shares of AB Ltd., 10,000 in number were sold on 31-3-2017, at Rs 500, for cash share.

(b) The above shares of 10,000, were acquired by ‘X’ in the following manner:

(i) Received as gift from his father on June 1, 1980, the market price on April 1, 1981 Rs 40 per share. (5,000 sha res)

(ii) Bonus shares received from AB Ltd. on 21-7-1995 (2,000 shares).

(iii) Purchased on 1-2-2002 at the price of Rs 125 per share (3,000 shares).

(c) Purchased one residential house at Rs 30,00,000, on 1-9-2017 from the sale proceeds of shares.

(d) ‘X’ is already owning a residential house, even before the purchase of above house.

You are required to compute the taxable capital gain.

Ans: LTCG (3,40,568); STCG 15,000

P5: Mr. A who transfers land and building on 2-1-2017, furnishes the following information :

(i) Net consideration received Rs 10 lakhs.

(ii) Value adopted by stamp valuation authority, which was not contested by Mr. A Rs 17 lakhs.

(iii) Value ascertained by Valuation officer on reference by the Assessing Officer Rs 17 lakhs.

(iv) This land was distributed to Mr. A on the partial partition of his HUF on 1-4-1981. Fair market value of the land as on 1-4-1981 was Rs 1,10,000. (v) A residential building was constructed on the above land by Mr. A at a cost of Rs 3,20,000 (construction completed on 1-12-2013 during the Financial year 2013-14.

(vi) Short-term capital loss incurred on sale of shares during the Financial year 2013-14 Rs 2,05,000.
Compute amount of gain and also Mr. A seeks your advice as to the amount to be invested in NHAI bonds so as to be exempt from clutches of capital gain tax.

Ans: 79,113; 79,113 should be invested; 2,05,000 shall be carried forward to next year. The assessee can invest in NHAI within 6 months of the date of transfer i.e. by 1-7-2017. It may be noted that in case the assessee is a resident and does not have any other income, then no investment in bonds is required as income is upto the basic exemption.

P6: Mr. C inherited from his father 8 plots of land in 1980. His father had purchased the plots in 1960 for Rs 5 lakhs. The fair market value of the plots as on 1-4-1981 was Rs 8 lakhs. (Rs 1 lakh for each plot)

On 1st June 2006, C started a business of dealer in plots and converted the 8 plots as stock-in-trade of his business. He recorded the plots in his books at Rs 45 lakhs being the fair market value on that date. In June 2011, C sold the 8 plots for Rs 50 lakhs.

In the same year, he acquired a residential house property for Rs 45 lakhs. He invested an amount of Rs 5 lakhs in construction of one more floor in his house in June 2011. The house was sold by him in June 2016 for Rs 63,50,000.

The valuation adopted by the registration authorities for charge of stamp duty was Rs 95,50,000. As per the assessee’s request, the Assessing Officer made a reference to a Valuation Officer. The value determined by the Valuation Officer was Rs 97,20,000. Brokerage of 1% of sale consideration was paid by C.

Ans: PY 11-12 : LTCG 3,48,000; BI 5,00,000. PY 16-17 : LTCG 23,20,895