In this case
the Amount recorded in books will be treated as full value of consideration
and not the fair market value.
Note :-
Similar will be the case on Transfer of capital asset by a Member to AOP / BOI .
Q1
Mr A purchased a Building for Rs 13 lacs on 10 July 2013
Later he started a partnership with B called AB & Co and introduced building as his capital contribution on 1 Sep 2015
Fair Market value was Rs 16 lacs as on that date
However,partnership firm booked it at 20 lacs by passing entry
01/09/2015
Building A/c Dr 2000000
To A's Capital Account 2000000
Calculate Capital Gains
View answer
In this case,Full Value of Consideration will be 20 lacs and not 16 lacs
Period of holding from 10 July 2013 to 1 September 2015 is less than 3 years
Hence it is STCG
No indexation wil be done
| Particulars | Amt |
| Full Value of Consideration | 2000000 |
| Less | |
| Expenses of Transfer | 0 |
| COA | 1300000 |
| COI | 0 |
| Short Term Capital Gain/(Loss) | 700000 |