Taxmann's Taxation (Tax) | CRACKER

Contents PAGE

Chapter-wise Marks Distribution

I-5

Previous Exams Trend Analysis

I-7

Chapter-wise Comparison with Study Material

I-11

SECTION A INCOME TAX LAW Chapter 1 Basic concepts

1.3

Chapter 2 Residence and scope of total income

2.1

Chapter 3 Incomes which do not form part of total income

3.1

Chapter 4 Income from salaries

4.1

Chapter 5 Income from house property

5.1

Chapter 6 3URÀWV DQG JDLQV IURP EXVLQHVV RU SURIHVVLRQ

6.1

I-13

I-14

CONTENTS

PAGE

Chapter 7 &DSLWDO JDLQV

7.1

Chapter 8 Income from other sources

8.1

Chapter 9 &OXEELQJ RI LQFRPH

9.1

Chapter 10 Set off and carry forward of losses

10.1

Chapter 11 'HGXFWLRQV IURP JURVV WRWDO LQFRPH

11.1

Chapter 12 $JULFXOWXUDO LQFRPH

12.1

Chapter 13 &RPSXWDWLRQ RI WRWDO LQFRPH DQG WD[ SD\DEOH

13.1

Chapter 14 Advance tax, TDS and TCS

14.1

Chapter 15 )LOLQJ RI UHWXUQ

15.1 SECTION B GST

Chapter 16 GST in India-An Introduction

16.3

Chapter 17 Supply under GST

17.1

CONTENTS

I-15 PAGE

Chapter 18 &KDUJH RI *67

18.1

Chapter 19 Place of Supply

19.1

Chapter 20 Exemptions from GST

20.1

Chapter 21 Time of supply

21.1

Chapter 22 Value of supply

22.1

Chapter 23 Input tax credit

23.1

Chapter 24 5HJLVWUDWLRQ

24.1

Chapter 25 7D[ LQYRLFH FUHGLW DQG GHELW QRWHV

25.1

Chapter 26 Accounts and Records

26.1

Chapter 27 E-Way Bill

27.1

Chapter 28 Payment of tax

28.1

Chapter 29 Tax Deduction at Source & Collection of Tax at Source

29.1

Chapter 30 Returns

30.1

I-16

CONTENTS

PAGE

SECTION C MCQs & INTEGRATED CASE STUDIES (INCOME TAX LAW) Chapter 31 Multiple Choice Questions (MCQs)

31.3

Chapter 32 ,QWHJUDWHG FDVH VWXGLHV

32.1 SECTION D

MCQs & INTEGRATED CASE STUDIES (GST) Chapter 33 Multiple Choice Questions (MCQs)

33.3

Chapter 34 ,QWHJUDWHG FDVH VWXGLHV

34.1

7

CAPITAL GAINS

CHAPTER

Q1. Ms. Mohini transferred a house to her friend Ms. Ragini for ` 32,00,000 on 01-10-2023. The Sub-Registrar valued the land at ` 48,00,000. Ms. Mohini contested the valuation and the matter was referred to Divisional Revenue Officer, who valued the house at ` 41,00,000. Accepting the said value, differential stamp duty was also paid and the transfer was completed.

You are required to explain provisions of Income-tax Act, 1961 applicable to present case and also determine the total income of both Ms. Mohini and Ms. Ragini taking into account the above said transactions.

Cost inflation index: F.Y. 2014-15 =240, F.Y. 2023-24 =348.

[May 2015, 8 Marks] Ans. Computation of Taxable Income of Ms. Mohini (Assessment year 2024-25) Particulars Amount (`) Amount (`) Capital Gain: Gross Sale Consideration (Note 1) 41,00,000 Less: Indexed Cost of Acquisition being value as per Divisional Revenue Officer (Note 2) (26,50,000 × 348/240) (38,42,500) Long term Capital Gain 2,57,500 Income from Other Sources: Other Income 3,80,000 Gross Total Income 6,37,500 Less: Deduction under Chapter VIA NIL Total Income 6,37,500

7.1

TAXMANN®

The total income of Mohini and Ragini for the assessment year 202425, before considering the transfer of said house are ` 3,80,000 and ` 4,45,000 respectively. Ms. Mohini had purchased the house on 15th May 2014 for ` 25,00,000 and registration expenses were ` 1,50,000.

7.2

SEC. A : INCOME TAX LAW

Notes: 1. The Gross Sale Consideration of the house is taken as per Divisional Revenue Officer as ` 41,00,000 which is higher than 110% of the actual sale consideration of ` 32,00,000.

2. The cost of acquisition of the house is ` 26,50,000 (Purchase price ` 25,00,000 + Registration charges ` 1,50,000).

Computation of Taxable Income of Ms. Ragini (Assessment year 2024-25) Particulars

Amount (`) Amount (`)

Income from Other Sources: Inadequate consideration (Note 3)

9,00,000

Other Income

4,45,000

Gross Total Income

13,45,000

Less: Deduction under Chapter VIA

TAXMANN®

Total Income

NIL 13,45,000

3. The Inadequate consideration is paid by Ms. Ragini to Ms. Mohini.

The Difference of ` 9,00,000 (` 41,00,000 – 32,00,000).

Q2. Mr. Martin sold his residential house property on 08-06-2023 for ` 70 lakhs which was purchased by him for 20 lakhs on 05-05-2007.

He paid ` 2 lakhs as brokerage for the sale of said property. The stamp duty valuation assessed by sub-registrar was ` 90 lakhs. He bought another house property on 25-12-2023 for 15 lakhs. He deposited 10 lakhs on 10-01-2024 in the capital gain bond of National Highway Authority of India (NHAI).

He deposited another 10 lakhs on 10-07-2024 in the capital gain deposit scheme with SBI for construction of additional floor of house property. Compute income under the head “Capital Gains” for A.Y. 2024-25 as per Income-tax Act, 1961 and also Income tax payable on the assumption that he has no other income chargeable to tax.

Cost inflation index for Financial Years 2007-08 = 129 and 2023-24 = 348.

[Nov. 2015, 8 Marks] Ans. Computation of Taxable Income of Mr. Martin (Assessment year 2024-25) Particulars Amount (`) Amount (`) Capital Gain: Gross Sale Consideration (Being Stamp Valuation 90,00,000 Authority)

7.3

CH. 7 : CAPITAL GAINS

Particulars

Amount (`) Amount (`) Less: Brokerage (2,00,000) Net Sale Consideration 88,00,000 Less: Indexed Cost of Acquisition (20,00,000×348/129) (53,95,349) Long term Capital Gain 34,04,651 Less: Exemption under Section 54 (Purchase of New Residential House) (15,00,000) Less: Exemption under Section 54 (Deposited in Capital Gain Account Scheme) (10,00,000) Less: Exemption under Section 54EC – NHAI Bonds — Not eligible (Note 3) Taxable Long term Capital Gain Gross Total Income Less: Deduction under Chapter VIA Total Income Total Income Rounded off nearest ` 10

(NIL)

(25,00,000) 9,04,651 9,04,651 Nil 9,04,651 9,04,650

1. The Gross Sale Consideration is taken as per Stamp Valuation Authority of the residential house as ` 90,00,000 which is higher than 110% of the actual sale consideration of ` 70,00,000.

2. As per Section 54:

On transfer of residential house building or land appurtenant thereto, being a long-term capital asset.

If the amount of capital gain exceeds ` 2 Crore – then Assessee may at his option, purchase one residential house in India within one year before or 2 years after the date of transfer or construct one residential house in India within a period of three years after the date of transfer.

If the amount of capital gain does not exceed ` 2 Crore – then Assessee may at his option, purchase two residential houses in India within one year before or 2 years after the date of transfer or construct two residential houses in India within a period of three years after the date of transfer.

If an assessee has exercised the option to purchase or construct two residential houses in India, he shall not be subsequently entitled to exercise the option for the same in any other assessment year.

3. In this case NHAI Bonds are purchased after six months from the date of transfer of the house, he is not entitled for Section 54EC.

TAXMANN®

Notes:

7.4

SEC. A : INCOME TAX LAW

Computation of Tax Liability of Mr. Martin (Assessment Year 2024-25) Particulars Tax on Long Term Capital Gain ` 6,54,650 (` 9,04,650 – 2,50,000 basic exemption @ 20%) Add: HEC @ 4% 1,30,930 Tax Liability Rounded off to

Amount (`) 1,30,930 5,237 1,36,167 1,36,170

Q3. Discuss the taxability or otherwise in the hands of the recipient as per the provisions of the Income-tax Act, 1961.

ABC Private Limited closely held Company issued 10,000 shares at ` 130 Per share. The face value of the share is ` 100 per share and the fair market value of the share is ` 120 per share. [May 2016, 2 Marks] Ans. Taxability in the hands of ABC Private Limited

TAXMANN®

Particulars Issue Price of the Share Fair Market Value of the Share Number of Shares Taxable Amount (130-120)×10,000 = ` 1,00,000

Amount (`) 130 120 10,000 1,00,000

Q4. State with reason whether the following receipt is taxable or not under the provision of Income-tax Act, 1961?

Mr. Suman received an advance of ` 3 lakhs on 06-06-2023 to transfer his residential house property. Since the transfer was not effected during the previous year due to failure in negotiations, he deducted the advance money forfeited from the cost of acquisition of the property.

[Nov. 2016, 2 Marks] Ans. The followings are the provisions of Sale of capital asset: Particulars (i)

Section 51 & Section 56(2)(ix)

Relevant Provisions

If advance money is forfeited during financial year 2013-14 or earlier than it is not taxable till Capital Asset is transferred in the hands of recipient. But if capital assets transferred then advance money will be deducted from the cost of acquisition of the asset.

If advance money is forfeited in financial year 2014-15 on or after then it is taxable in the hands of recipient under Section 56(2)(ix) under the head

7.5

CH. 7 : CAPITAL GAINS

Particulars

Relevant Provisions Income from other sources. It is taxable in the year in which advance money is forfeited.

(ii)

Case Ans.

In this case Rupees three lakhs were forfeited in 202324, hence as per section 56(2)(ix) it is taxable under the head income from other sources and Mr. Suman is liable to pay tax on Rupees 3,00,000 in financial year 2023-24.

The value determined by the stamp duty authority on 16-08-2023 was Rupees 100 lakhs. Whereas on 14-01-2024 it was ` 1,01,50,000.

Mr. Sunil had acquired the property on 01-04-2002 for ` 10 lakhs. After recovering the sale proceed from Mr. Dhaval, he purchased another residential house property for ` 35 lakhs. Compute the income under the head capital gain for the assessment year 2024-25. Also compute tax liability.

Cost inflation index for financial years 2002-03 = 105, 2003-04 = 109, 2023-24 = 348.

[Nov. 2017, 5 Marks] Ans. Computation of Taxable Capital Gain of Mr. Sunil (Assessment Year 2024-25) Particulars

Amount (`) Amount (`)

Gross Sale Consideration (Being Stamp Duty Value)

1,00,00,000

Less: Indexed Cost of Acquisition (10,00,000×348/105)

(33,14,286)

Long term Capital Gain Less: Sec. 54 Purchase of New Residential House Taxable Long term Capital Gain Less: Deduction under Chapter VIA Total Income Rounded off to

66,85,714 (35,00,000) 31,85,714 Nil 31,85,714 31,85,710

TAXMANN®

Q5. Mr. Sunil entered into an agreement with Mr. Dhaval to sell his residential house located at Navi Mumbai on 16-08-2023 for Rupees 80 lacs. The sale proceeds was to be paid in the following manner: a. 20% through account payee bank draft on the date of agreement. b. 60% on the date of the possession of the property. c. Balance after the completion of the registration of the title of the property.

Mr. Dhaval has handed over the possession of the property on 15-12-2023 and the registration process was completed on 14-01-2024.

He paid the sale proceed as per the sale agreement.

7.6

SEC. A : INCOME TAX LAW

Computation of Tax Liability of Mr. Sunil (Assessment Year 2024-25) Particulars

TAXMANN®

Tax on Long Term Capital Gain ` 29,35,710 (31,85,710 – 2,50,000 basic exemption) @ 20% Add: HEC @4% of ` 5,87,142 Tax Liability Rounded off to

Amount (`) 5,87,142 23,486 6,10,628 6,10,630

Notes: 1. As per Section 50C, if full value of consideration is claimed by an Assessee less than Stamp Duty Value, in that case Full value of consideration is taken to be Stamp Duty Value. In this case the Gross Sale Consideration is taken as per Stamp Valuation Authority of the house as ` 1,00,00,000 which is higher than 110% of the actual sale consideration of ` 80,00,000.

2. In this case 20% amount was given on the date of agreement through account payee bank draft hence Stamp Duty Value is taken for the date of agreement.

3. If the date of agreement and date of registration are different in that case value on the agreement shall be taken into consideration provided some advance was given otherwise than in cash on or before the agreement.

Q6. Star Enterprises has transferred its unit R to A Ltd. by way of Slump Sale on January 3, 2024. The summarized Balance Sheet of Star Enterprises as on that date is given below: Liabilities Own Capital

Amount (` in Lakhs) 1,750

Accumulated Profit 670 and Loss Balance

Other Liabilities

Assets

Amount (` in Lakhs)

Fixed Assets Unit P

200

Unit Q

150

Unit R

600

Other Assets

Unit P

90

Unit P

570

Unit Q Unit R

160 140

Unit Q Unit R

850 440

Total

2,810

Total

2,810

CH. 7 : CAPITAL GAINS

7.7

Using the further information below, Compute the Capital Gains arising from slump sale of Unit R for Assessment year 2024-25. (i) Slump sale consideration on transfer of Unit R was ` 930 lakhs. (ii) Fixed Assets of Unit R includes land which was purchased at ` 110 lakhs in the year 2012 and was revalued at ` 140 lakhs. (iii) Other fixed assets are reflected at ` 460 lakhs. (i.e. ` 600 lakhs less value of land) which represents written down value of those assets as per books. The written down value of these asset is ` 430 lakhs. (iv) Unit R was set up by Star Enterprises in Oct., 2011.

Note: Cost of Inflation Indices for the financial years 2010-11 = 167; 2011-12 = 184 and 2023-24 = 348.

[May 2018, 10 Marks] Ans. Computation of Capital Gain in Slump Sale of Unit R (Assessment Year 2024-25) Particulars

Notes: 1. Indexation is not done in case of Slump Sale.

2. Holding period for unit R is from date of commencement of unit to date of transfer. The period is October 2011 to 3rd January 2024, which is more than 36 months and hence long term capital gain arises.

3. Fixed assets mean land cost + depreciable assets as per written down value Fixed assets = ` 110 Lakhs + ` 430 Lakhs = 540 Lakhs.

4. Other Assets of Unit R = ` 440 lakhs.

5. Liabilities of unit R = ` 140 lakhs.

6. Net Worth of unit R = Fixed asset + Other assets - liabilities Net Worth of unit R = ` 540 + ` 440 – ` 140 = ` 840 lakhs.

TAXMANN®

Sale consideration of unit R Less: Expenditure on transfer Net sale consideration Less: Net worth of Unit R (Note 6) Long term capital gain

Amount (` Lakhs) 930 NIL 930 840 90

7.8

SEC. A : INCOME TAX LAW

Q7. Mr. Subramani sold a house plot to Mrs. Vimala for ` 45 lakhs on 12-5-2023. The valuation determined by the stamp valuation authority was ` 53 lakhs. Discuss the tax consequences of above, in the hands of each one of them, viz., Mr. Subramani & Mrs. Vimala. Mrs. Vimala has sold this plot to Ms. Padmaja on 21-3-2024 for ` 55 lakhs. The valuation as per stamp valuation authority remains the same at ` 53 lakhs.

Compute the capital gains arising on sale of the house plot by Mrs. Vimala.

Note: None of the parties viz. Mr. Subramani, Mrs. Vimala & Ms. Padmaja are related to each other; the transactions are between outsiders.

[Nov. 2018, 6 Marks] Ans. Tax consequences in the hands of Mr. Subramani

TAXMANN®

Particulars

Relevant Provisions

Section 50C

If the consideration received on transfer of capital asset being land or building or both is less than stamp duty value (as per Stamp Duty Valuation Authority), in that case the stamp duty value is treated as full value of consideration if it exceeds 110% of actual consideration.

Case Ans.

In this case Mr. Subramani sold the house for ` 42 Lakhs which is less than ` 53 Lakhs (Stamp Duty Value). Hence ` 53 Lakhs is treated as full value of consideration for Mr. Subramani.

Tax consequences in the hands of Mrs. Vimala Particulars

Relevant Provisions

Section 56(2)(x) Any Property/Money received by way of Gift without clause (a) consideration the aggregate value of which exceeds ` 50,000/-, the whole of the aggregate value of such sum is taxable.

Section 56(2)(x) clause (b)

Any Immovable Property received without consideration, the stamp duty value of which exceeds ` 50,000/- then value of the property will be stamp duty value of such property.

With effect from 31-03-2019, any Immovable Property received for consideration and the amount of such excess is more than the higher of the following amounts: (i) the amount of ` 50,000, and (ii) the amount equal to 10% of consideration then stamp duty value of such property as exceeds such consideration is value of such property.

If any person receives any immovable property for a consideration which is less than the stamp duty value then excess amount shall be considered as gift in the hands of recipient.

7.9

CH. 7 : CAPITAL GAINS

Particulars Case Ans.

Relevant Provisions Hence as per section 56(2)(x), in this case, Mrs. Vimala purchased the house for ` 45 Lakhs which is less than ` 53 Lakhs being stamp duty value. Therefore difference of ` 8 Lakhs (` 53 - ` 45) is taxable in the head Income from Other Sources.

Computation of Taxable Capital Gain in the hands of Mrs. Vimala (Assessment Year 2024-25) Particulars

Amount (`)

Gross Value of Consideration

55,00,000

Less: Cost of Acquisition

53,00,000

Taxable Short Term Capital Gain

2,00,000

Cost Inflation Index for various financial year are as under (2013-14 = 220), (2019-20 = 289), (2021-22 = 317), (2023-24 = 348).

[May 2019, 6 Marks] Ans. Computation of Capital Gain of Mr. Roy (Assessment Year 2020-21) Particulars

Amount (`)

Gross Value of Consideration Less: Indexed Cost of Acquisition (30,00,000 ×

1,57,00,000

289 ) 220

39,40,909

Long Term Capital Gain

1,17,59,091

Less: Exemption u/s 54

(1,17,59,091)

Taxable Long Term Capital Gain

NIL

TAXMANN®

Q8. Mr. Roy owned residential house in Noida, it was acquired on 09.09.2013 for ` 30,00,000. He sold it for ` 1,57,00,000 on 07.01.2020.

Mr. Roy utilized the sale proceeds of the above property to acquire a residential house in Panchkula for ` 2,05,00,000 on 20.07.2021. The said house property was sold on 31.10.2023 and he purchased another residential house in Delhi for ` 2,57,00,000 on 02.03.2024. The property at Panchkula was sold for ` 3,25,00,000. Calculate capital gain chargeable to tax for assessment years 2020-21 and 2024-25. All working should be part of your answer.

7.10

SEC. A : INCOME TAX LAW

Computation of Capital Gain of Mr. Roy (Assessment Year 2024-25) Particulars

Amount (`)

Gross Value of Consideration

3,25,00,000

Less: Indexed Cost of Acquisition (2,05,00,000 – 1,17,59,091) = 87,40,909 ×

348 317

(95,95,698)

Long Term Capital Gain

2,29,04,302

Less: Exemption u/s 54

(2,29,04,302)

Taxable Long Term Capital Gain

NIL

Notes:

TAXMANN®

1. The house property, whether let-out or self-occupied, is a long-term capital asset and it must be held for a period of more-than 24 months before sale or transfer.

2. Under section 54, long-term capital gain on sale of residential house is exempt, if another house is purchased within one year prior or two years, hence from the date of sale or new house is constructed within next three years from date of sale. Exemption is restricted up to amount of long-term capital gain or cost of new house, which is lower.

3. In assessment year 2020-21 capital gain on sale of Noida house is ` 1,17,59,091 and cost of new house purchased in Panchkula is ` 2,05,00,000. Hence least amount ` 1,17,59,091is exempt.

4. In assessment year 2024-25 residential house in Panchkula was sold for ` 3,25,00,000 on 31.10.2023, which was purchased for ` 2,05,00,000 on 20.07.2021. Since this house was sold within three years from date of purchase, exemption ` 1,17,59,091is revoked. Accordingly cost of acquisition of Panchkula house will be 2,05,00,000 minus ` 1,17,59,091 348

= ` 87,40,909 and indexed cost of acquisition = ` 87,40,909 × = 317 ` 95,95,698.

5. Accordingly exemption of long-term capital gain on sale of Panchkula house is restricted to cost of new house purchased in Delhi ` 2,57,00,000 or long-term capital gain on sale of Panchkula house ` 2,29,04,302, whichever is lower. Hence exemption = ` 2,29,04,302.

Taxable Long Term Capital Gain for assessment year 2024-25 is NIL.

7.11

CH. 7 : CAPITAL GAINS

Q9. Mr. Rajan provides you the following details with regard to sale of certain securities by him. During financial year 2023–24.

1. Sold 10,000 shares of A limited on 05-04-2023 @ 650 per share. A Limited is a listed company. These shares were acquired by Mr. Rajan on 05-04-2017 @ ` 100 per share. STT was paid both at the time of acquisition as well as at the time of transfer of such shares which was effected through a recognised Stock Exchange. On 31-01-2018 the shares of A limited were traded on a recognised stock exchange as under: highest price ` 300 per share average price ` 290 per share lowest price ` 280 per share 2. Sold 1000 units of B Mutual Fund on 20-04-2023 @ ` 50 per unit

3. Sold 100 shares of C Limited on 25-04-2023 @ ` 200 per share. C Limited is an unlisted company. These shares were issued by the company as bonus shares on 30-09-2000. The Fair Market Value of these shares as on 01-04-2001 was ` 50 Per share.

C.I.I. FY 2017-18 = 272; FY 2018-19 = 280 FY 2023-24 = 348 Calculate the amount chargeable to Tax under the head capital gain and also calculate tax on such gains for assessment year 2024-25 assuming that the other incomes of Mr. Rajan exceeds the maximum amount not chargeable to tax. (Ignore Surcharge and Cess) [Nov. 2019, 6 Marks] Ans. Capital Asset : Listed Equity Shares Particulars Cost of Acquisition computation (being share is acquired before 01-02-2018)

Amount (`)

Amount (`)

Amount (`)

Amount (`)

TAXMANN®

B Mutual Fund is an equity oriented fund. These units were acquired by Mr. Rajan on 15-04-2017 @ ` 10 per unit. STT was paid only at the time of transfer of such units. On 31-01-2018 the Net Asset Value of the units of B Mutual Fund was ` 55 per unit.

7.12

SEC. A : INCOME TAX LAW

Particulars

Amount (`)

Amount (`)

Fair Market Value on 31-012018 (Highest Price in the Stock Exchange) Higher of the two: (a) Cost of Acquisition 100/share (b) Lower of: FMV as on 31-01-2018 300/share Fair Value Consider- 650/share ation.

100/share

300/share

Amount (`) 300/share

Amount (`)

300/share

300/share

Amount

Amount

Computation of Capital Gain of Mr. Rajan (Assessment Year 2023-24)

TAXMANN®

Particulars Gross Sale Consideration Received (10,000 Shares × @650)

65,00,000

Less: Expenses incurred for this transfer

NIL

Net Sale Consideration

65,00,000

Less: Cost of Acquisition (10,000 Shares × @300)

(30,00,000)

Taxable Long-term Capital Gain

35,00,000

Capital Asset : Equity oriented Mutual Fund Particulars

Amount (`)

Amount (`)

Amount (`)

Amount (`)

Cost of Acquisition computation (being Unit is acquired before 01-02-2019) Cost of Acquisition computation

10/Unit

Higher of the two: (a) Cost of Acquisition

10/Unit

10/Unit

(b) Lower of:

FMV as on 31-01-2018

55/Unit

Fair Value Consideration. 50/Unit

50/Unit

50/Unit

50/Unit

Amount (`)

Amount (`)

Computation of Capital Gain of Mr. Rajan (Assessment Year 2023-24) Particulars Gross Sale Consideration Received (1000 Units × @50/Unit) Less: Expenses incurred for this transfer

50,000 NIL

7.13

CH. 7 : CAPITAL GAINS

Particulars

Amount (`)

Net Sale Consideration

Amount (`) 50,000

Less: Cost of Acquisition (1000 Units × @50/Unit)

(50,000)

Taxable Long-term Capital Gain

NIL

Computation of Capital Gain on Unlisted Equity Shares of Mr. Rajan (Assessment Year 2024-25) Particulars

Amount (`)

Gross Sale Consideration Received (100 Shares × @200/ share)

Amount (`) 20,000

Less: Expenses incurred for this transfer

NIL

Net Sale Consideration

20,000

Less: Indexed Cost of Acquisition (100×50×331/100)

(16,550)

Taxable Long-term Capital Gain u/s 112

3,450

(Assessment Year 2024-25) Particulars

Amount (`)

Amount (`)

Amount (`)

Long Term Capital Gain on Listed Equity Shares 35,00,000 Long Term Capital Gain on Equity Oriented NIL Mutual Fund

35,00,000

Less: Exemption Up to ` 1,00,000

(1,00,000) 34,00,000

Tax @10% on ` 34,00,000 Long Term Capital Gain on Unlisted Shares

3,40,000 3,450

Tax @20% on ` 3,450

690

Total Capital Gain Tax

3,40,690

Notes: 1. Section 55(2)(ac) in respect of Long Term Capital Asset acquired by the assessee before 01-02-2018 shall be higher of: (i) Cost of Acquisition of such asset and (ii) Lower of Fair Market Value of such asset, and Full value of consideration received or accruing as a result

of the transfer of the capital asset.

TAXMANN®

Computation of Capital Gain Tax of Mr. Rajan

7.14

SEC. A : INCOME TAX LAW

2. Fair Market value means: Nature of Capital Asset

Fair Market Value

Capital Asset is Listed on any Highest Price of the capital asset recognized stock exchange and traded quoted on such exchange on 31-01on 31-01-2018 2018 Capital Asset is listed on any recognized Highest price of such asset on such stock exchange, but no trading in such exchange on a date immediately asset on such exchange on 31-01-2018 preceding 31-01-2018, when such asset was traded on such exchange.

Capital Asset is a Unit and is not Listed Net Asset Value of such asset as on on a recognized stock exchange on 31-01-2018 31-01-2018

TAXMANN®

Equity Share Not listed on recognized An amount which bears to the cost stock exchange as on 31-01-2018, but of acquisition the same proportion as listed on the date of transfer or cost inflation index for the financial Equity share which is listed on a year 2017-18, bears to the CII for the recognized stock exchange on the First year in which the asset was date of transfer and which became held by the assessee or the property of the assessee in For the year beginning on 01consideration of share which is not 04-2001, listed on such exchange as on 31Whichever is later.

01-2018 by way of transaction not regarded as transfer u/s 47.

Q10. Mr. Govind purchased 600 shares of “Y” limited at ` 130 per shares on 26.02.1981. “Y” limited issued him, 1,200 bonus shares on 20.02.1986. The fair market value of these shares at Mumbai Stock Exchange as on 01.04.2001 was ` 900 per share and ` 2,000 per share as on 31.01.2018. On 31.01.2022 he converted 1,000 shares as his stock in trade. The shares was traded at Mumbai Stock Exchange on that date at a high of ` 2,200 per share and closed for the day at ` 2,100 per share.

On 07.07.2023, Mr. Govind sold all 1,800 shares @ ` 2,400 per share at Mumbai Stock Exchange and Securities Transaction Tax was paid.

Compute Total Income of Mr. Govind for the Assessment Year 2024-25 Cost Inflation Index: Previous Year 2001-02=100, 2020-21=301, 202324=348.

[Nov. 2019, 5 Marks]

TAXATION (TAX) CRACKER AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO NO. OF PAGES BINDING TYPE

: K.M. Bansal, Sanjay Kumar Bansal : TAXMANN : FEBRUARY 2024 : 7TH EDITION : 9789357788403 : 546 : PAPERBACK

Rs. 675

DESCRIPTION This book is prepared exclusively for the Intermediate Level of Chartered Accountancy Examination requirement. It covers the questions & detailed answers strictly as per the new syllabus of ICAI .

The Present Publication is the 7th Edition for the CA-Inter | New Syllabus | May 2024 Exams. This book is authored by CA (Dr) K.M. Bansal & Dr Sanjay Kumar Bansal, with the following noteworthy features: • Strictly as per the New Syllabus of ICAI • This book is divided into four sections: o Income Tax Law o GST o MCQs & Integrated Case Studies | Income Tax o MCQs & Integrated Case Studies | GST • Coverage of this book includes: o Past Exam Questions & Answers, including: - CA Intermediate Nov. 2023 – Taxation o Application Based MCQs o Integrated Case Studies • [Solutions] are provided as per the Assessment Year 2024-25 and Latest GST Law • [Marks Distribution] Chapter-wise marks distribution from May 2018 onwards • [Previous Exam Trend Analysis] from Dec. 2021 onwards • [Comparison with ICAI Study Material] is provided chapter-wise

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