Mode of Computation of Capital Gains in respect of transfer of Immovable property:
Section 48 of the Income-tax Act, 1961 provides for mode of computation of capital gains. This is explained in form of illustration as under:
Capital Gain Computation
| Full Value Consideration | 9,50,000/- | ||
| Stamp Duty Valuation | 10,00,000/- | ||
| Sales consideration or Stamp Duty valuation as per Sec 50 C, whichever is higher | 10,00,000/- | ||
| Less: Expenditure incurred wholly and exclusively In connection with such Transfer | (50,000) | ||
| Net sales Consideration | 9,50,000/- | ||
| Short Term Capital Asset \ Long Term Capital Asset | |||
| Less:Cost of Acquisition \ Indexed Cost of Acquisition | (4,50,000) | ||
| Less:Cost of Improvement \ Indexed Cost of Improvement | (3,00,000) | (7,50,000) | |
| Taxable Capital Gains | 2,00,000 | ||