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THE MAGIC WAND OF INDEXATION!

Gujarat High Court holds capital gains on gifted or inherited assets also enjoy indexation from date of original holding! Section 49(1) of the Income-tax Act provides that where the capital asset has been acquired by the taxpayer in any of the modes such as on partition of a Hindu Undivided Family or under gift or Will or by succession or inheritance, etc., the cost to the previous owner shall be deemed to be cost...

RELIEVING PAIN ON CAPITAL GAIN!

Bombay & Delhi High Courts hold that taxpayers can enjoy indexation even on assets received via gift or inheritance     If your grandfather had acquired a plot of land for Rs.10,00,000 in late 1981, which you received by way of inheritance on his death in 2012 and you are planning to sell the same in early 2013 for a consideration of Rs.85,00,000, what would be the income-tax you would be required to pay on...

PERSONAL EFFECTS TAX EXEMPT!

Wearing apparel, furniture, utensils, vehicles, etc. held for personal use not liable to capital gains tax! Readers will recall that the Cost Inflation Index (CII) for purposes of computing the Indexed Cost of Acquisition for computation of Long Term Capital Gains for FY 2011-12 was 785. As against the same the Central Government has recently notified the CII for FY 2012-13 at 852. This reflects an 8.5% rise in...

PAVING FOR DOUBLE TAX SAVING!

ITAT Ahmedabad holds capital gains of Rs.1 crore exempt u/s.54EC, where investment is split in two financial years              Section 54EC of the Income-tax Act provides for exemption of taxable long term capital gains (LTCG) arising from the transfer of an asset, to the extent the amount of such gains are invested in notified bonds within a period of six months from the date of transfer. Notified for this...

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