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Tax on long Term Capital Gains

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By Jagriti Thakur-

Introduction- An inherited property as there is no sale,  the capital gains are not significant only a transfer of ownership. The Income Tax Act has specifically provided that the which are assets go through as gifts by way will. However, capital gains tax will be applicable the asset determine to sell it if the person who inherited.

The accrual of the capital again tax as per the section 45 of income tax act, 1961 in which is defined that the capital gains is considered to  the income of previous year. Thus at profit the capital gains emerge on the transfer of the capital asset and the income of the year is deemed to in which the transfer of the asset took place. The capital gain is to be taxed where in the previous year date of transfer is decided.

Computation of capital gains.

Under the head of the capital gains the income would be chargeable and that shall be computed by subtracted and deducted as the result of transfer of capital gains used in the from the value which of considered is received and the following accounts name are-

  1. In connection with transfer like the expenditure sustain exclusively and wholly.
  2. The cost of acquisition of the asset and cost of any improvement there to a capital asset being in shares in the transfer of the capital asset in the case where a person who is non-resident, the capital gains arise from the transfer of the capital asset.

By converting the cost of the expenditure sustain wholly acquisition and exclusively an Indian company shall be computed on the value of the consideration which can be received in the connection with such transfer and by this the transfer of the capital asset into foreign currency provided that along term capital asset where the long term capital gain came into light from the transfer other than that the gain from transfer of shares in the gain arising to non-resident.

In the first provision the Indian company referred provision of the clause hat it shall “cost of acquisition” and “cost of improvement” has been switch the word index of cost of acquisition and indexed cost of any improvement.

Under irrevocable trust or gift providing by section 47 of income tax act, 1961 are transferred on the date of such transfer the market value shall be deemed to the full value of consideration as the result of the motive of this section.

The cost of the acquisition of the capital asset that asset is deducted from sale as the cost of acquisition of asset in which sale proud of the asset the capital gains arising to the assesses. In the general sense the cost of acquisition of the asset has been purchased in the value of the property. In the cost of the acquisition the asset of interest paid  on the borrowed money for the asset purchasing. Sometimes by the way of succession the capital asset is obtained under will, gift etc. However the capital asset is not purchased.

 Cost with reference to some modes of acquisition – there are some following ways where the asset is main need by the assesses at the acquisition and that cost shall be previous owner of the property needed as assets increased as increased by the cost of improvement of assets this defines into the section 49(1) of the income tax act, 1961.

And in relation to a capital assets which is owned by the assesses in this connection “the previous owner of the property” the asset in mode of acquisition other the modes means the last owed person of the capital owner. The capital asset became the property. Of the previous owner where a fair market value at the cost of acquisition to the previous owner and that acquisition of the property cannot be ascertained.

By valuation officer of the ascertainment by the market value

The person who are examine experts in the concept of certain assets that determine the fair market utility of an asset that is obligatory to take help from the person. In certain cases by the valuation officer in Income tax act,1961 section 55 provided tat to get fair market value of the capital asset. The capital asset which considerate by the valuation offices in some stated that with the evaluation which made by the registered valuer the worth of the asset as profess by the asset in accordance is less that the fair of market value

To the work as valuer at odd with determined fees, which the person cannot be expert evaluates the asset, the board have issues the licence to the work as valuers  are obtainable to the assesses on payment of determined fees .

Cost of development– section 55(1)(b) of income tax act, 1961 defines that remuneration for the transfer which is made in to work out of the capital gain emerge to the assesses the cost of development is to be subtracted from the full value of consideration. Right to manufacturer or business of cost of development under the head where income is chargeable. The property which the person receive by the inheritance the cost spent by the asset on the property clearing of the mortgage  cannot be treated as cost of development.

Conclusion- At last we can conclude that tax is so important to run the country which is governed by the government for the welfare. As this article has based upon income tax the long term capital tax is mainly defines about the property and capital gains at profit the capital gains emerge on the transfer of the capital asset and the income of the year is deemed to in which the transfer of the asset took place.