Taxation - Income TaxQuestion 5597 of 146
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1. Determine income from capital gains and exemption available to Mr. Gopal for purchasing residential plot considering benefit of the assessee.

Options

ALong-term capital gain of ` 15,00,000 after no exemption.
BLong-term capital gain of ` 8,47,003 after no exemption.
CLong-term capital gain of ` 3,47,003 after claiming exemption of ` 5,00,000 u/s 54.
DLong-term capital gain of ` 12,00,000 after claiming exemption of ` 5,00,000 u/s 54.
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Correct Answer

Option ALong-term capital gain of ` 15,00,000 after no exemption.

All Options:

  • ALong-term capital gain of ` 15,00,000 after no exemption.
  • BLong-term capital gain of ` 8,47,003 after no exemption.
  • CLong-term capital gain of ` 3,47,003 after claiming exemption of ` 5,00,000 u/s 54.
  • DLong-term capital gain of ` 12,00,000 after claiming exemption of ` 5,00,000 u/s 54.

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Detailed Solution & Explanation

To determine the income from capital gains and the exemption available to Mr. Gopal, we analyze the transaction under the Income-tax Act, 1961:

1. **Classification of Capital Asset:**
* Mr. Gopal purchased the residential house property on 14.10.2021 for ₹ 45,00,000 and sold it on 31.08.2024 for ₹ 60,00,000.
* Since the period of holding of the residential house property exceeds 24 months (approximately 34 months), it is classified as a **Long-Term Capital Asset (LTCA)**.

2. **Computation of Capital Gains:**
* **Without Indexation (u/s 112 as amended by the Finance Act, 2024):**
textLongTermCapitalGain(LTCG)=textFullValueofConsiderationtextCostofAcquisition\\text{Long-Term Capital Gain (LTCG)} = \\text{Full Value of Consideration} - \\text{Cost of Acquisition}
textLTCG=60,00,00045,00,000=15,00,000\\text{LTCG} = ₹ 60,00,000 - ₹ 45,00,000 = ₹ 15,00,000
* **With Indexation (using Cost Inflation Index):**
textIndexedCostofAcquisition=45,00,000timesfrac363317=51,52,997\\text{Indexed Cost of Acquisition} = ₹ 45,00,000 \\times \\frac{363}{317} = ₹ 51,52,997
textLTCG=60,00,00051,52,997=8,47,003\\text{LTCG} = ₹ 60,00,000 - ₹ 51,52,997 = ₹ 8,47,003

3. **Exemption under Section 54:**
* Exemption under Section 54 is available if the capital gains from the sale of a residential house are invested in the purchase or construction of another **residential house**.
* Mr. Gopal purchased a **residential plot** for ₹ 5,00,000. Since buying a vacant residential plot without constructing a residential house does not qualify for exemption under Section 54, the exemption available is **Nil**.

4. **Beneficial Treatment:**
* The official suggested answer key provided by the ICAI designates Option A as the correct answer (LTCG of ₹ 15,00,000 with no exemption).

Hence, **Option A** is the correct answer.

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