CBDT has clarified the question as to what would be the Cost of Acquisition as on 1.4.2001 for properties purchased prior to 2001 under new Capital Gain Tax Regime.
With introduction of new Capital Gain Tax Regime by Union Budget 2024-25, many doubts have arisen. CBDT has recently issued 13 FAQ to answer these doubts. An issue has been raised as to what would be the Cost of Acquisition as on 1.4.2001 for properties purchased prior to 2001. CBDT has answered it as under:
For properties (land or building or both) purchased prior to 1.4.2001, the cost of acquisition as on 1.4.2001 shall be:-
(i) Cost of Acquisition of the asset to the assesse; or
(ii) the Fair Market Value (not exceeding the stamp duty value, wherever available) of such asset as on 1.4.2001.
Taxpayers can choose either option as per section 55(2)(b) of the Income-tax Act, 1961.
An illustration to explain the same is as under:
| S. No. | Particulars | Amount |
| 1. | Cost of acquisition of property in 1990 | 5 Lakhs |
| 2. | Stamp duty value as on 01.04.2001 | 10 Lakhs |
| 3. | Fair market Value (FMV) of the property as on 01.04.2001 | 12 Lakhs |
| 4. | Sale Consideration – Property sold on or after 23.07.2024 | 1 Crore |
| 5. | Cost of acquisition of property as on 01.04.2001 (Lower of stamp duty value or FMV) | 10 Lakhs |
| 6. | Indexed cost of acquisition in FY 2024-25 = 10×363/100 | 36.3 Lakhs |
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| LTCG (Old) | Tax (Old) @ 20% | LTCG (New) | Tax (New) @ 12.50% |
| 63.7 Lakhs | 12.74 Lakhs | 90 Lakhs | 11.25 Lakhs |
The taxpayer will have the option to avail roll over benefits for saving of tax.
ABCAUS Note: benefit of Indexed Cost of acquisition shall be available only for the transfers which takes place before the 23rd day of July, 2024
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