ly.
ii.
He had purchased a vacant land at a cost of Rs.60 lakhs in the financial year 2003-04.
Registration and other expenses were 10%. He constructed residential building on the said
land for Rs.75 Lakhs during financial year 2005-06. He entered into an agreement for sale of
the said building with Mr. Vasu in August, 2019. The sale consideration was fixed at Rs. 400
lakhs and on the date of agreement, Mr. Harsh received Rs.15 lakhs as advance in cash.
However, Mr. Vasu could not arrange the money on the due date, hence the advance paid by
him was forfeited by Mr. Harsh. He further entered into an agreement with Mr. Raathi to sell
the house for Rs.420 Lakhs. The sale deed was executed and registered on 15-02-2020 for the
agreed consideration, but the stamp duty value of the property was fixed at Rs.450 lakhs. Mr.
Harsh paid 1% brokerage on sale consideration received. Subsequent to sale, Mr. Harsh made
the following investments:
1. Acquired a residential house at Delhi for Rs. 60 lakhs
2. Acquired a residential house at Dubai for Rs. 30 lakhs
3. Subscribed to NHAI bonds: Rs 45lakhs on 30-05-2020 and Rs. 15 lakhs on
07-07-2020.
Compute the income chargeable under the head "Capital Gains" for assessment year 2020-21. The
choice of exemption must be in the manner most beneficial to the assessee indicating clearly the
reasons for it. Also explain the tax treatment of advance money received and retained by Mr. Harsh.
(Cost inflation index: FY 2003-04:109; FY 2005-06: 117; 2019-20: 289)
Answers
Answer:
hi Hello
Explanation:
He had purchased a vacant land at a cost of Rs.60 lakhs in the financial year 2003-04.
Registration and other expenses were 10%. He constructed residential building on the said
land for Rs.75 Lakhs during financial year 2005-06. He entered into an agreement for sale of
the said building with Mr. Vasu in August, 2019. The sale consideration was fixed at Rs. 400
lakhs and on the date of agreement, Mr. Harsh received Rs.15 lakhs as advance in cash.
However, Mr. Vasu could not arrange the money on the due date, hence the advance paid by
him was forfeited by Mr. Harsh. He further entered into an agreement with Mr. Raathi to sell
the house for Rs.420 Lakhs. The sale deed was executed and registered on 15-02-2020 for the
agreed consideration, but the stamp duty value of the property was fixed at Rs.450 lakhs. Mr.
Harsh paid 1% brokerage on sale consideration received. Subsequent to sale, Mr. Harsh made
the following investments: