Example 1

Suppose an asset purchased for 30000 ,next month sold for 40000 

What is 

  1. Full Value of Consideration
  2. Cost of Acquisition
  3. Short Term Capital Gain  

-a-

In this case,

Full Value of Consideration=40000

Cost of Acquisition=30000

Short Term Capital Gain=100000

-ea-

Example 2

Suppose an asset purchased for 30000 ,2000 spent on repairing,next month sold for 40000 

-a-

In this case,

Full Value of Consideration=40000

Cost of Acquisition=30000

Cost of Improvement=2000

Short Term Capital Gain=40000-30000-2000=8000

-ea-

Example 3

Suppose an asset purchased for 30000 ,2000 spent on repairing,next month sold for 40000 

Also Rs 1000 Commission paid to broker for Sale

-a-

In this case,

Full Value of Consideration=40000

Cost of Acquisition=30000

Cost of Improvement=2000

Expenses of Transfer=1000

Short Term Capital Gain=40000-30000-2000-1000=7000

-ea-

 

COMPUTATION FORMAT

FORMAT AMT
Full Value of Consideration XX
Less  
Expenses of Transfer XX
COA(Cost of Acquisition) XX
COI (Cost of Improvement) XX
Capital Gains XX
Less  
Exemptions u/s 54 etc XX
Net Income from Capital Gains XX

Here

Full Value of Consideration (FVC)
This means the Selling Price i.e. the amount received on Sale of the Asset

 

Expenses of Transfer
It means the expenses incurred on Sale etc like Stamp Duty, Brokerage/Commission paid to Agent etc

 

Cost of Acquisition (COA)

It means the purchase price of assets.

 

Cost of Improvement (COI)

It means cost of improving the asset i.e. any cost of modification or enhancement of value of asset.

 

QUESTIONS

Q1
Suppose jwellery purchased for Rs 100000 on 10 April 2015.It was sold for Rs 130000 on 20 March 2016
Compute Capital Gain

-a-

FVC=130000

COA=100000

PARTICULARS AMT
Full Value of Consideration 130000
Less  
Expenses of Transfer  
COA 100000
COI NIL
Short Term Capital Gain 30000

-ea-

Q2
Suppose Mr A  purchased Property for Rs 15 lacs on 10 April 2015. Mr A spent 8 lacs on construction of the house property, which was sold for Rs 40 lacs on 20 March 2016.
Compute Capital Gain

-a-

PARTICULARS AMT
Full Value of Consideration 4000000
Less  
Expenses of Transfer  
COA 1500000
COI 800000
Short Term Capital Gain 1700000

-ea-

Q3
Suppose In Q2 Mr A gave 1% commission to Broker on Sale of Property

-a-

Expenses of Transfer=Commission=1%*4000000=40000

PARTICULARS AMT
Full Value of Consideration 4000000
Less  
Expenses of Transfer 40000
COA 1500000
COI 800000
Short Term Capital Gain 1660000

 -ea-

  1. Income Tax
  2. Income from Capital Gains
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About the Author

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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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