Capital Gains

(c)Manish purchased 1,000 listed equity shares of ₹ 10 each at ₹ 100/- per share from a broker on 4th May, 2016. He paid ₹ 3,000 as brokerage. On 15th March, 2024, he was given bonus shares by the company on the basis of one share for every two shares held. On the same date, he was also given a right to acquire 1,000 rights shares @ ₹ 90/- per share. He acquired 50% of the right shares offered and sold the balance 50% of the rights entitlement for a sum of ₹ 67,500 on 7th April 2024. The right shares were allotted to him on 30th April, 2024. All the shares held by him were sold on 24th September, 2024 @ ₹ 280/- per share through a recognized stock exchange.

Compute the Taxable Income from Capital Gain of Manish for the assessment year 2025-26. Assuming FMV as on 31st January, 2018 for the above share is 150/- per Share. Ignore section 115BAC pertaining to alternative tax regime.

Mr. Micklu having business Income of ₹ 2,11,850. Long Term Capital Gain from sale of Land is ₹ 86,678 and Income from other sources from Bank Interest is ₹ 2,172 for the Financial Year ended 31.03.2024. What will be the tax payable by him if he is opting under section 115 BAC ?

(A)NIL

(B)₹ 177

(C)₹ 8,688

(D)None of the above

Cost of improvement shall be indexed if :

(A)It is expended before the acquisition of Capital Assets

(B)If it is done before 36 months before the date of transfer

(C)If it is done before 12 months before the date of transfer

(D)If it is a LTCA

Mr. A entered into an agreement with Mr. B for Sale of Building for ₹ 35 Lakhs in June 2023 and received advance of ₹ 3 Lakhs. As a condition of this agreement if the agreement has been cancelled advance money would have been forfeited. The agreement has been cancelled in August 2023 and that advance have been forfeited. This advance money is :

(A)Taxable as Capital Gain

(B)To be reduced from the cost of acquisition

(C)Taxable as Income under Income from other sources

(D)Not Taxable at all

A person has business income of ₹ 3,20,000. His Long Term Capital Gain is ₹ 45,000 and Short term Capital loss is ( ₹ 25,000). What will be his total income in this case ?

(A)₹ 3,20,000

(B)₹ 3,40,000

(C)₹ 2,95,000

(D)₹ 3,65,000

In terms of Section 2(42A), listed securities are treated as long-term capital asset, if they are held for a period of more than :

(A)12 months

(B)36 months

(C)24 months

(D)48 months

Rajat purchased a car for his personal use for ₹ 5,00,000 in April, 2020 and sold the same for ₹ 5,50,000 in July, 2023. The taxable capital gains is .....................

(A)Nil

(B)₹ 5,50,000

(C)₹ 50,000

(D)₹ 4,00,000

In terms of section 2 (42A), listed securities are treated as long-term capital asset, if they are held for a period of more than :

(A)12 months

(B)36 months

(C)24 months

(D)48 months

What is the holding period in the case of land and building for the purpose of classifying the same as long-term capital asset?

(A)12 months

(B)24 months

(C)36 months

(D)None of the above

Which of the following losses is/are not allowed as a deduction, in computing income from Business and Profession ?

(i)Pre-incorporation losses

(ii)Capital Losses, which are dealt with under the head Capital Gain

(iii)Loss incurred after closure of business

(A)(i) and (ii)

(B)(ii) and (iii)

(C)(iii)

(D)(i), (ii), (iii)

Which out of the following is the capital asset ?

(A)A maruti dealer holding cars for sale

(B)A maruti dealer has honda city car for his personal use

(C)Jewellery held by a jeweller for his personal use

(D)Jewellery held by a jeweller which has been held as SIT

Champa Lal (age 65 years) received interest from M.P. State Government due to late payment of compensation for compulsory acquisition of capital asset amounting to ₹ 12,00,000 on 17th July, 2021. What amount is taxable under head Other Sources for assessment year 2022-23 ?

(A)₹ 6,00,000

(B)₹ 7,00,000

(C)₹ 12,00,000

(D)Nil

During the previous year 2020-21, Mr. Akhil has the following income and brought forward losses :

(1)Short-term capital gains on sale of shares of ₹ 1,00,000

(2)Long-term capital loss of A.Y. 2020-21 of ₹ 60,000

(3)Short-term capital loss of A.Y. 2020-21 of ₹ 35,000

(4)Long-term capital gain of ₹ 40,000.

What is the capital gain taxable in the hands of Mr. Akhil for the Assessment Year 2021-22?

(A)₹ 1,05,000

(B)₹ 45,000

(C)₹ 65,000

(D)₹ 1,40,000

Ganesh has sold a piece of land located at Jaipur for a consideration of ₹ 25 lakhs to Ram on 15-5-2020. Ram paid stamp duty of ₹ 3,00,000 @ 10% of the value determined by the Stamp Valuation Authority of the land. The land was purchased by Ganesh on 15.08.2019 for ₹ 12 lakh. Ganesh was not satisfied with the value determined by the authority and therefore his case was referred to valuation officer. The valuation officer determined the value of land at ₹ 26 lakhs. The taxable capital gains in hands of Ganesh in A.Y. 2021-22 will be :

(A)₹ 13 Lakh

(B)₹ 14 Lakh

(C)₹ 16 Lakh

(D)₹ 18 Lakh

Whenever there is a transfer of a capital asset by a partner to the firm by way of capital contribution or otherwise, the consideration of such transferred capital asset as per Income Tax Act, 1961 would be taken as :

(A)The market value of the Capital Asset on the date of transfer.

(B)The Cost less notional depreciation of the Capital asset.

(C)The value of the asset recorded in the books of the firm.

(D)Any of the above, at the option of the assessee.

Xavier, citizen of India a resident individual engaged in salaried employment in Ahmedabad purchased 3000 shares on 03.07.2020 in CD Ltd, @ ₹ 75 per share. On 10.07.2020, these 3000 shares were gifted by him to his wife. CD Ltd allotted 1000 bonus shares to Mrs. Xavier on 30.01.2021. Mrs. Xavier on 05.03.2021 sold/transferred 4000 shares of CD Ltd for Rs. 150 per share to Rajeev outside stock exchange. On the date of sale (05.03.21), the lowest quotation of shares of CD Ltd at BSE was ₹ 250 per share. The tax implication of the above transactions in the hands of Mr. and Mrs. Xavier for A.Y. 2021-22 will be :

(A)The LTCG arising on transfer of 4000 shares will be taxable in the hands of Xavier by virtue of sec. 64(1)(iv)

(B)The STCG arising on transfer of 4000 shares will be taxable in the hands of Xavier by virtue of sec. 64(1)(iv)

(C)The STCG of Rs. 2,25,000 arising on transfer of original shares will be included in the income of Xavier and STCG of ₹ 1,50,000 arising on transfer of bonus shares will be taxable as income of Mrs. Xavier.

(D)The STCG of ₹ 5,25,000 arising on transfer of original shares will be included in the income of Xavier and STCG of ₹ 2,50,000 arising on transfer of bonus shares will be taxable as income of Mrs. Xavier

The estimated gross total income of Raja is ₹ 7,70,000 which includes ₹ 80,000 on account of long-term capital gain earned on 16.09.2020. Compute the advance tax payable including long-term capital gain by Raja assuming ₹ 5,000 has been deducted at source during the financial year 2020-21 ?

(A)₹ 66,500

(B)₹ 69,160

(C)₹ 64,160

(D)₹ 61,500

Monika enters into an agreement on 7th April, 2019 to transfer a piece of land for an agreed consideration of ₹ 66,00,000 by taking an advance payment of ₹ 10,00,000 by an account payee cheque. Sale deed of the piece of land was executed on 28th December 2019. Indexed cost of acquisition of the piece of land as per provision of the Act is computed at ₹ 34,00,000. Stamp valuation Authority determined the value of land on 07.04.2019 at ₹ 68,50,000 and on 28.12.2019 at ₹ 71,00,000. Find out the amount of long- term capital gain which shall be chargeable to tax in the assessment year 2020-21.

(A)₹ 32,00,000

(B)₹ 34,50,000

(C)₹ 35,00,000

(D)₹ 37,00,000

When foreign institutional investor has longterm capital gain on sale of listed share (STT paid) of ₹ 5 lakhs, the amount of tax payable on such capital gain would be :

(A)NIL

(B)@ 20%

(C)@ 10%

(D)@ 30%

Which of the following is not a capital asset ?

(A)Jewellery

(B)Equity shares

(C)Personal effects

(D)Land and building

Pankaj, a Company Secretary in practice for the past 30 years, retired and gave his practice to Chandra in consideration for ₹ 15 lakh by way of goodwill. His income for the past 3 assessment years are ₹ 12 lakh, ₹ 10 lakh and ₹ 8 lakh respectively. The amount of goodwill chargeable to income-tax as capital gain would be :

(A)NIL

(B)₹ 15,00,000

(C)₹ 10,00,000

(D)₹ 3,00,000

Clean Air (P) Ltd. converted into a LLP on 30-4-2018. It is not liable to pay capital gains on conversion if the total value of assets in any of the 3 previous years preceding the previous year in which conversion took place, does not exceed :

(A)₹ 1 crore

(B)₹ 3 crore

(C)₹ 5 crore

(D)₹ 10 crore

Chatterjee received ₹ 1 lakh towards advance for sale of his residential house to Xavier on 10-11-2018. As the buyer Xavier could not pay the balance amount of consideration within 3 months, Chatterjee forfeited the advance money in accordance with the sale agreement. The advance money forfeited is :

(A)Deductible from cost of the asset

(B)Taxable as long-term capital gain

(C)Taxable as income from other sources

(D)Taxable as short-term capital gain

In the case of non-resident Indian (not being a company) income from long-term capital gain is chargeable to tax at ........................ when the asset was originally acquired by remitting convertible foreign exchange into India.

(A)5%

(B)10%

(C)15%

(D)20%

Durafon (P) Ltd.. engaged in steel industry, acquired a vacant piece of land on 15th May, 2016. The company sold the said land in December, 2018. The profit earned on sale of vacant land of ₹ 10 lakh shall be taxable as :

(A)Business income

(B)Income from other sources

(C)Short term capital gain

(D)Long term capital gain

In the case of a non-resident, which of the following income is not taxable in his hand :

(A)Interest received from Government of India

(B)Capital gain on transfer of capital assets situated in India

(C)Interest received from a person resident in India on money borrowed and used outside India for carrying a business

(D)Royalty received from a person resident in India for the patent rights used in India

Anand, a resident individual having computed for the previous year 1st April, 2017 to 31st March, 2018 his business loss at ₹ 60,000, short term capital gain on sale of gold of ₹ 40,000 long term capital gain on sale of house property of ₹ 3,60,000. The amount of total income to be declared in the return for the assessment year 2018-19 by Anand shall be .............

(A)₹ 4,00,000

(B)₹ 3,40,000

(C)₹ 4,00,000 and carry forward loss of ₹ 60,000

(D)None of the above

A building was acquired on 1-4-1995 for ₹ 20,00,000 and sold for ₹ 80,00,000 on 1-6-23. The fair market value of the building on 1-4-2001 was ₹ 25,00,000. Its stamp du ty v alue on th e sam e da te was ₹ 22,00 ,000. Determine the capital gains on sale of such building for the A.Y. 2024-25 ?

CII for F.Y. 2001-02 : 100; F.Y. 2023-24 : 348

(A)₹ 3,44,000

(B)₹ 13,80,000

(C)₹ 60,00,000

(D)₹ 2,75,000

What is the base financial year for calculation for Cost Inflation Index under Income Tax Act 1961 ?

(A)1999-2000

(B)2000-2001

(C)2001-2002

(D)1980-1981

(b)Giriraj had purchased a residential site at Kanpur on 12th March, 2019 for ₹ 22 lakh. On 26th May, 2022, this asset was converted by him into stock-in-trade. On this date, the stamp duty valuation was ₹ 28 lakh. This asset was sold by him on 25th June, 2023 for ₹ 34 lakh to an outsider at arm’s length price. The stamp duty valuation as on this date was ₹ 40 lakh. Brokerage at 2% on sales value was paid.

What are the incomes chargeable to tax for Giriraj in respect of these transactions and what will be the assessment year(s) in which they will be chargeable to tax ?

The cost inflation indices for the various years are as under :

What is the Cost Inflation Index for Financial Year 2022-23 ?

(A)328

(B)329

(C)331

(D)335

Suresh entered into an agreement with Ramesh for sale of a building for ₹ 30,00,000 in June, 2021. Suresh received advance of ₹ 3,00,000. Subsequently the agreement was cancelled and Suresh forfeited the advance money. The advance money is ............. .

(A)Taxable under the head of Income from Other Sources in the year it is forfeited

(B)Taxable under the head of Income from Capital Gain in the year it is forfeited

(C)Deduction from cost of acquisition of such asset after doing indexation

(D)Deduction from Cost of acquisition of such asset before doing indexation

Kirti acquired a house property on 25th July, 2015 for ₹ 8,00,000. On 15th June, 2021 she became a partner in a partnership firm. On this day, she transferred this property to partnership firm as her capital contribution. The fair market value of the property as on 15th June, 2021 was ₹ 20,00,000, but it was recorded in the books of account of the firm at ₹ 18,00,000. Compute capital gain chargeable to tax in the hands of Kirti for the assessment year 2022-23 ?

(Cost inflation index for F.Y. 2014-15=240, 2015-16=254 and 2021-22=317)

(A)LTCG ₹ 8,01,575

(B)LTCG ₹ 10,01,575

(C)LTCG ₹ 7,43,333

(D)Not Taxable

Long-term capital gains on listed securities (other than units) and Zero coupon bonds are chargeable to tax :

(A)@ 20% computed after indexation of such bonds

(B)@ 10% computed without indexation of such bonds

(C)@ 20% computed without indexation of such bonds

(D)@ 10% computed after indexation of such bonds

Manjula (age 62) sold a vacant land for ₹ 45,15,000 on 05.02.2021. The said land was acquired by her on 07.01.2019 for ₹ 28,00,000. She deposited ₹ 5 lakhs in Rural Electrification Bond on 30.03.2021. Cost inflation index : F Y 2018-19 = 280; FY 2020-21 = 301. Compute the capital gain chargeable to tax for the assessment year 2021-22.

(A)Short-term capital gain ₹ 17.15 lakhs

(B)Long-term capital gain ₹ 10.05 lakhs

(C)Short-term capital gain ₹ 12.15 lakhs

(D)Long-term capital gain ₹ 12.15 lakhs

Kapil Dev is engaged in manufacturing activity. The WDV of plant and machinery as on 01.04.2020 was ₹ 6,88,000. The entire plant and machinery were sold on 30.03.2021 for ₹ 7,80,000. The original cost of plant and machinery amounted to ₹ 14,65,000 acquired on 05.04.2017. Cost inflation index : FY 2017-18 = 272; 2020- 21 = 301. Compute capital gain and state its nature.

(A)Short-term capital gain ₹ 7,77,000

(B)Short-term capital gain ₹ 92,000

(C)Long-term capital gain ₹ 6,85,000

(D)Long-term capital gain ₹ 18,647

Amin (age 68) sold on 12.05.2020 one vacant site at Baroda for ₹ 90 lakhs. The vacant site was inherited by him from his father in July 1999 as per the ‘will’ of his father. The FMV of vacant site on 01.04.2001 was ₹ 5 lakhs. He acquired a residential apartment in Singapore for ₹ 70 lakhs on 15.10.2020. Compute the capital gain chargeable to tax in the hands of Amin for the assessment year 2021.22.

Cost inflation index F.Y. 2001-02 = 100/ F.Y. 2020-21 = 301

(A)Long-term capital gain ₹ 74.95 lakhs

(B)Long-term capital gain NIL

(C)Long-term capital gain ₹ 4.95 lakhs

(D)Long-term capital gain ₹ 65 lakhs

Rama Devi (age 53) sold 100 equity shares for ₹ 8,40,000 (STT paid) on 20.05.2020. Those shares were acquired on 21.03.2013 for ₹ 3 lakhs. The FMV as on 31.01.2018 was ₹ 5,50,000. How much is taxable under section 112A ? What is nature of such gain/ loss ? Cost inflation index FY 2012-13 = 200/2017- 18 = 272/2020-21 = 301.

(A)₹ 2,31,360/Long-term capital gain

(B)₹ 3,88,500/Long-term capital gain

(C)₹ 2,90,000/Long-term capital gain

(D)₹ 12,250/Short-term capital gain

Rahim converted into stock in trade on 10th May 2007 his capital asset which was acquired by him on 15th June, 2002 for ₹ 70,000. Subsequently the stock in trade so converted was sold for ₹ 18,00,000 on 15th July 2019. Fair market value of the asset on 10th May 2007 was ₹ 4,80,000. By taking the CII for the years 2002-03 as 105, 2007-208 as 129 and of 2019-20 as 289; determine the amount of capital gain taxable in assessment year 2020-21.

(A)₹ 3,23,179

(B)₹ 13,20,000

(C)₹ 2,87,333

(D)₹ 4,10,000

Richard acquired 1,000 preference shares of ₹ 100 each in Terry Ltd. on 10-4- 2016 for ₹ 1,32,000. He received 10,000 equity shares of ₹ 10 each on conversion of preference shares into equity shares. The Fair Market Value (FMV) of equity shares on the date of such conversion was ₹ 2,20,000.

Cost Inflation Index F.Y. 2016-17 = 264; F.Y. 2018-19 = 280.

The taxable long-term capital gain would be :

(A)NIL

(B)₹ 70,000

(C)₹ 10,000

(D)₹ 15,000

Indexed cost of acquisition of the house property purchased for ₹ 80 lakh in June, 1998 and was sold in December, 2018 will be of ₹ ................... (worked out by taking the CII of 1998-99 as 351; of the year 2001-02 as 100; of the year 2018-19 as 280) and FMV of the house property as on 1st April, 2001 of ₹ 90 lakh.

(A)₹ 63,81,766

(B)₹ 90 lakh

(C)₹ 252 lakh

(D)₹ 71,79,487

D transferred Zero Coupon Bonds on 20th August, 2018. These bonds were acquired during the financial year 2010-11. The capital gain computed on the redemption with indexation benefit is ₹ 2 lakh and without indexation benefit is ₹ 3 lakh. The long term capital gain would be chargeable to tax on such Zero Coupon Bonds in A.Y. 2019-20 :

(A)@ 5%

(B)@ 10%

(C)@ 20%

(D)@ 30%

(b)M & Sons., a Hindu Undivided Family (HUF), had purchased a land for INR 1,50,000 in 2002-03. In the previous year (PY) 2006-07, a partition takes place and the coparcener, B, gets this plot valued at INR 200,000. In PY 2007-08 he incurs expenses of INR 2,50,000 on the plot towards fencing of the plot of land. B then sells this plot at INR 15,00,000/- in PY 20018-19. You are required to compute the capital gains for Assessment Year (AY) 2019-20. Cost Inflation Index (CII) 2002-03-105, 2007-08-129 & 2019-20-280.

(a)Y acquired a house from his father by way of gift on 5th May 2005. On this day its Fair Market Value (FMV) was ₹ 4,20,000. His father had purchased the house in the year 2002-03 for ₹ 2,50,000. Y introduced the house as his capital contribution on 5th May, 2018 to a partnership firm in which he became a partner on that date.

The fair market value of the house on 5th May, 2018 was ₹ 20,00,000, but it was taken in the books of accounts of the firm at ₹ 16,00,000. Compute the amount of capital gain taxable in the hands of Y, if any, for the AY 2019-20. Cost Inflation Index (CII) for the year 2002-03—105, 2018-19—280.

(ii)Ms. Padmaja, aged 42, a resident individual, sold her residential house for ₹ 55 lakh to Robert on 1st July, 2017. The value of land for stamp duty purposes was ₹ 65 lakh. The land was acquired on 30th April, 1970 for ₹ 1,50,000. The fair market value of the land on 1st April, 1981 was ₹ 2,50,000 and on 1st April, 2001 was ₹ 10,00,000.

She paid brokerage to Ashwin @ 2% of the sale consideration. No tax was deducted at source. She acquired a residential house at Erode, Tamil Nadu in December, 2017 for ₹ 25,00,000 and subscribed to capital gain bonds issued by Rural Electrification Corporation on 10th Oct., 2017 for ₹ 9,50,000 and in bonds of National Highways Authority of India on 20th Feb., 2018 for ₹ 8,00,000.

Ms. Padmaja paid ₹ 20,000 by credit card for health insurance policy on her life in March, 2018. The property was let out for monthly rent of ₹ 30,000 till 31th June, 2017.

Cost inflation index : FY 2017-18 = 272.

Compute the total income of Ms. Padmaja for the Assessment Year 2018-19.

A person has a long-term capital gain from the sale of long-Term Capital Asset for ₹ 80 Lakhs during the financial year 2023-24. He would like to invest all the full amount in the bonds redeemable after three years issued by NHAI under Section 54EC of the Income Tax Act, 1961. The Amount of capital Gain Exempted under Section 54EC will be :

(A)₹ 80 Lakhs

(B)₹ 50 Lakhs

(C)₹ 30 Lakhs

(D)₹ 40 Lakhs

(a)Compute the taxable capital gain in the hands of Bajrang for the assessment year 2024-25.

Under which Section, the assessee has to reinvest the entire net consideration to claim full exemption on long term capital gains earned from transfer of longterm capital assets other than a residential house during the previous year :

(A)54F

(B)54E

(C)54D

(D)54C

Rakesh sold his residential building for ₹ 300 lakh and the indexed cost of acquisition of the building was ₹ 120 lakh. He acquired a residential building for ₹ 110 lakh at Pune and another residential building at Jaipur for ₹ 90 lakh subsequently. How m uch is the amount eligible for exemption under section 54 of the Income Tax Act, 1961?

(A)₹ 110 lakh

(B)₹ 90 lakh

(C)₹ 180 lakh

(D)₹ 200 lakh

If new agricultural land purchased for which exemption was claimed u/s 54B is transferred within 3 years then.

(A)Capital gain exempt u/s 54B earlier shall be separately taxable as capital gains

(B)Capital gain exempt u/s 54B earlier shall be added to the cost of acquisition of new house property

(C)Capital gain exempt u/s 54B earlier shall be reduced from cost of acquisition of new house property

(D)The entire capital gain on new transfer shall be taxable

Santhi sold a vacant land for ₹ 2 crores on 18th June, 2021. The cost of acquisition of land was ₹ 25 lakhs in the year 2009-10. She deposited 90 lakhs in RECL bonds in October 2021. The amount of capital gain liable to tax after deduction under sec 54EC is .................. (Assessee has not opted for section 115BAC).

Indexation F.Y. 2021-22=317,

F.Y. 2009-10 = 148

(A)₹ 56,45,270

(B)₹ 86,45,270

(C)₹ 1,46,45,270

(D)₹ 96,45,270

Section 54F of Income Tax Act, 1961 is applicable to ......................

(A)Individual/HUF

(B)Firm

(C)Company

(D)None of the above

For claiming exemption u/s 54F, the amount to the extent of net consideration price is to be invested in the purchase of residential house property in India within :

(A)Two years from the date of transfer

(B)Three years from the date of transfer

(C)One year before or two years after the date of transfer

(D)One year before or three years after the date of transfer

In the case of investment in eligible startups which of the following condition is not applicable for the purpose of allowing exemption under section 54EE ?

(A)Investment must be of long-term capital gain

(B)Investment to be made within 6 months after the transfer of capital asset

(C)Maximum investment is ₹ 50 lakhs

(D)The amount is to be invested in convertible debentures issued by a company

Exemption under section 54G on fulfilling of specified conditions is available on:

(A)Shifting of industrial undertaking from urban area to a Special Economic Zone (SEZ)

(B)Shifting of industrial undertaking from urban Area by government

(C)Compulsory acquisition of land and building

(D)Transfer of certain capital assets as specified

Mr. P acquired a building from his friend on 08.11.2023 for ₹ 30 Lakhs. The stamp duty value of the building on the date of purchase was ₹ 33.50 Lakhs. What will be the income that is chargeable in the hands of Mr. P ?

(A)NIL

(B)₹ 50,000

(C)₹ 17,500

(D)₹ 3,50,000

( a )Kartik purchased a house property on 20th June, 1995 for consideration of ₹ 2,25,000. He incurred following expenses for making addition/alternation to the house property :

This House property is sold by Kartik to Jagdish on 10th August, 2023 for ₹ 58,00,000. The valuation determined by the stamp valuation authority was ₹ 65,50,000. Expenses incurred on transfer of house property was ₹ 25,000.

Compute the capital gains arising on sale of the house property by Kartik for the assessment year 2024-25.

Section 50C of the Income Tax Act makes a Special Provision for determining the full value of consideration in case of transfer of :

(A)Plant and Machinery

(B)Land

(C)Building

(D)Land or Building or both

(ii)Ajay, a property dealer, entered into an agreement with Mukesh to sell a plot on 6 th April, 2022 for ₹ 55 lakh. He received an advance of ₹ 12 lakh from him on the date of agreement by account payee cheque. Transfer took place on 12th September, 2022. The valuation determined by the stamp valuation authority on the date of agreement and date of transfer was ₹ 59 lakh and ₹ 63 lakh, respectively. Mukesh has sold this plot to Deepti on 24th March, 2023 for ₹ 65 lakh. The valuation as per stamp valuation authority was ₹ 64 lakh on 24th March, 2023.

Discuss the tax consequences of above, in the hands of Ajay and Mukesh. Also, compute the capital gain in the hands of Mukesh.

the transactions are between outsiders.

Narendra has purchased a house in Ajmer for self-residence on 10.04.2020 for ₹ 45 lakh. (Stamp duty value also the same). The house was purchased with assistance of bank loan which was sanctioned on 25.03.2020 and disbursed on 05.04.2020. Narendra has paid interest of ₹ 4.26 lakhs on such loan during the P.Y. 2020-21. State the treatment of interest paid by him be given for claiming deduction as per provisions of Act, while filing return of Income for A.Y. 2021- 22:

(A)Interest of ₹ 2 lakh allowable u/s 24

(B)Interest of ₹ 2 lakh allowable u/s 24 and ₹ 2.26 lakh allowable u/s 80 EEA

(C)Interest of ₹ 2 lakh allowable u/s 24 and ₹ 1.5 lakh allowable u/s 80 EEA

(D)Interest of ₹ 4.26 lakh allowable u/s 80 EEA

As per section 48 of Income Tax Act, 1961, it is provided that where the stamp duty value does not exceed ______ of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purpose for computing profits and gains from transfer of such assets, be deemed to be the full value of the consideration.

(A)105%

(B)110%

(C)120%

(D)150%

All & All is a charitable trust registered under the Income-tax Act, 1961. It acquired a vacant land for ₹ 8,40,000 from Allen. The stamp duty value of the land was ₹ 10,20,000. How much will be added to the income of the trust towards purchase of property for inadequate consideration ?

(A)₹ 27,000

(B)₹ 1,80,000

(C)NIL

(D)₹ 1,38,000

Radhey has sold his residential house on 11th Sept., 2017 for ₹ 75 lakh. Value applied by the Stamp Valuation Authority on the date of registration of the Conveyance Deed on 15th Sept., 2017 was of ₹ 115 lakh. Radhey disputed the valuation made by the Stamp Valuation Authority and asked the departmental valuation officer to determine the value of the house on the date of registration of deed. The departmental valuation officer determined the value of the house on the date of registration of the deed at ₹ 120 lacs. Sale value of the house to be taken for calculation of capital gain in A.Y. 2018-19 as per section ............. shall be of .................

(A)50C, ₹ 115 lakh

(B)50C, ₹ 120 lakh

(C)48, ₹ 75 lakh

(D)45, Indexed cost of ₹ 75 lakh

Albert aged 75 years mortgages his property with Housing Finance Corporation under ‘‘Reverse Mortgage Scheme’’. During the Financial Year 2022-23 he received 30,000 p.m. from the mortgage. Calculate the amount which is taxable under Income Tax Act, 1961.

(A)Nil

(B)3,60,000

(C)2,52,000

(D)60,000

Ram, aged 45 years received 12 instalments of amount of ₹ 42,000 on the basis of reverse mortgage scheme during the financial year 2021-22. Compute the amount of tax in the hands of Ram as per section 115BAC of the Income Tax Act, 1961 for the Assessment Year 2022-23:

(A)₹ 13416

(B)₹ 13832

(C)₹ 12900

(D)Nil

Which among the following is false in case of ‘‘Reverse Mortgage’’ ?

(A)Under Reverse mortgage a person who owns a house property have the option to mortgage the property with a scheduled bank or finance company to get a regular income in the form of periodical installments.

(B)This scheme is applicable for senior citizens who have a regular income.

(C)Under this scheme, the lender will recover the amount paid i.e. principal and interest thereon by selling the property after the death of borrower.

(D)The lender will have to give the option to the legal heirs of the borrower to repay the loan amount along with interest for the release of property.

Which out of the following transactions shall not be regarded as transfer as per provision of section 47 of the Income Tax Act, 1961 for the purpose of working of amount of Capital Gains ?

(A)Transfer made outside India of Rupee Denominated Bond (RDB’s) an Indian company, issued outside India by a non-resident to another non-resident.

(B)Compulsory acquisition of capital asset under any law.

(C)Extinguishment of rights in respect of Capital Asset.

(D)Conversion of Capital asset into stock in trade.

Ajit (age 62) received 25,000 per month from 01.07.2020 by entering into reverse mortgage transaction with State Bank of India. The property mortgaged was acquired by him on 01.01.2002 for ₹ 30 lakhs. The fair market value of the property as on 01.07.2020 was ₹ 70 lakhs. How much of the amount received by Ajit under reverse mortgage is chargeable to tax for the assessment year 2021- 22 ?

(A)2,25,000

(B)Nil

(C)3,00,000

(D)3,60,000

Murali (age 67) reports the following transactions and you are required to determine which of the transaction shall be regarded as transfer and liable for tax ?

(A)Distribution of capital assets on partial partition of HUF

(B)Transfer of capital assets under reverse mortgage

(C)Transfer of capital assets by holding company to subsidiary company for valuable consideration

(D)Distribution of capital assets on the dissolution of partnership firm

Which out of the following is not the correct statement as to the definition/ scheme of “Reverse Mortgage”?

(A)A person (generally a senior citizen) who owns a house property have the option to mortgage the property with a schedule bank or finance company to get a regular income in periodical installments.

(B)Scheme is not applicable for a person (generally a senior citizen) who does not have regular income.

(C)The lender will recover the amount paid i.e. principle and interest thereon by selling the property after the death of borrower.

(D)The lender will have to give the option to the legal heirs to repay the loan amount along with interest for the release of property.

The essential requirement for the incidence of tax on capital gains is the transfer of a "Capital Asset". Definition of transfer given under the Act is an inclusive definition. Find out which of the following are being included under transfer :

(i)Conversion of asset into stock in trade

(ii)Extinguishment of rights

(iii)Redemption of Sovereign Gold Bonds issued by RBI by an individual

(iv)Transfer of asset under reverse mortgage

(A)(i), (iii) & (iv)

(B)(i) & (ii)

(C)(i), (ii) & (iii)

(D)All the above four

Venkat (age 63) received ₹ 25 lakh from State Bank of India under reverse mortgage scheme on 5-6-2018. The house property under reverse mortgage was acquired on 1-4-1980 for ₹ 90,000. The fair market value on 1-4-1981 was ₹ 1,50,000. The fair market value as on 1-4-2001 was ₹ 8,40,000. The fair market value on 5-6-2018 was ₹ 21 lakh. The cost inflation index for the financial year 2018-19 is 280. The amount of capital gain liable to tax would be :

(A)Long-term capital gain ₹ 12,48,000

(B)Long-term capital gain ₹ 10,80,000

(C)Long-term capital gain ₹ 1,48,000

(D)NIL

Nair, a retired person of 68 years of age obtained ₹ 10,000 per month from 1st April, 2018 on reverse mortgage of his self- occupied residential property from a bank. The fair rent of the property is ₹ 15,000 per month. The income chargeable to tax in respect of amount received on reverse mortgage for his self-occupied house property for the F.Y. 2018-19 would be :

(A)₹ 1,20,000

(B)₹ 1,26,000

(C)NIL

(D)(15000 - 10000) x 12 = 60000

(b)Chirag a resident individual, aged 62 years sold an urban agricultural land for ₹ 74 lakhs to Anupam on July 15, 2024 when the stamp duty value of agricultural land was ₹ 95 lakhs. However, in the “agreement to sell” the agricultural land was entered on May 15, 2024 and Anupam gave ₹ 4 lakhs as advance through IMPS on the same day. The stamp duty value at the time of agreement was ₹ 84 lakhs. Chirag paid 1% of sale consideration as commission to a broker. The land was purchased by him on May 25, 2003 for ₹ 10.85 lakhs and it was being used for agricultural purposes by him since its purchase.

Chirag purchased another agricultural land in rural area on January 1, 2025 for ₹ 39 lakhs and this land was sold by him on March 12, 2025 for ₹ 45 lakhs and he invested the entire sale proceeds in fixed deposits with a nationalized bank on the same day.

Compute the Capital Gain chargeable to tax for Chirag for Assessment Year 2025-26 if he exercises the option of shifting out of the default tax regime provided under section 115BAC.

Cost Inflation Index for : F.Y. 2003-04 = 109; F.Y. 2024-25 = 363.

Capital asset excludes all except .............

(A)Stock-in-trade

(B)Personal effects

(C)Jewellery

(D)Agricultural land in India

Capital assets excludes all except :

(A)Stock-in-trade

(B)Personal effects

(C)Jewellery

(D)Agricultural land in India

Which of the following lands is to be treated as urban agricultural land :

(A)A land situated at area 10 km. from the municipality having population exceed 10,00,000

(B)A land situated at area 3 km. from the municipality having population exceed 1,00,000 but not exceed 10,00,000

(C)A land situated at area 7 km. from the municipality having population exceed 1,00,000 but not exceed 10,00,000

(D)A land situated at area 3 km. from the municipality having population exceed 10,000 but not exceed 1,00,000

Anuj owned land measuring 2 hectares and carried on agricultural operations. The land would be treated as agricultural land and not capital asset if it is within the aerial distance of ..................... kms from the local limits of municipality when its population exceeds 10 lakhs.

(A)2

(B)4

(C)6

(D)8

Adjusted GTI (Gross Total Income) for the purpose of section 80G of Income Tax Act, 1961 means ........................... .

(A)Gross Total Income - STCG u/s 111A – LTCG u/s 112/112A – Exempt Incomes

(B)Gross Total Income - STCG u/s 111A – LTCG u/s 112/112A – Exempt Incomes - All deductions under chapter VI-A except Deduction u/s 80G.

(C)Gross Total Income – STCG u/s 111A – LTCG u/s 112/112A– All deductions under chapter VI-A except Deduction u/s 80G

(D)Gross Total Income – All deductions under chapter VIA except Deduction u/s 80G

Ayaan, aged 75 years and a resident in India, has a total income of ₹ 2,60,00,000, comprising long term capital gain taxable under section 112 of ₹ 35,00,000, long term capital gain taxable under section 112A of ₹ 30,00,000 and other income of ₹ 1,95,00,000. What would be his tax liability for A.Y. 2022-23. Assume that Ayaan has not opted for the provisions of section 115BAC :

(A)₹ 86,45,000

(B)₹ 86,14,840

(C)₹ 86,58,000

(D)₹ 96,26,800

Rupam has computed his gross total income of ₹ 5,60,000 for the Asessement Year 2021-22 which includes ₹ 4,70,000 on account of long-term capital gain from sale of equity shares which are taxable us 112A of the lncome Tax Act. He paid ₹ 1,30,000 as premium of life insurance taken for his own life. Compute the amount of total income of Rupam if he is a senior citizen. (Assuming assessee has not opted for section 115BAC)

(A)₹ 4,70,000

(B)₹ 4,30,000

(C)₹ 90,000

(D)₹ 4,10,000

Compute tax payable by Rajkumar for the Previous Year 2020-21: Taxable income of Rajkumar by normal rates of income tax is ₹ 2,10,000, Long-term capital gain (with indexing benefit) ₹ 2,00,000 and short term capital gain taxable u/s 111A is ₹ 4,00,000 (Securities Transaction Tax on such sale is paid). (Assuming assessee has not opted for section 115BAC)

(A)₹ 2,10,000

(B)₹ 1,00,000

(C)₹ 95,680

(D)₹ 60,000

Rahim purchased house on 1st April, 2001 for ₹ 2,00,000 and incurred ₹ 3,00,000 on improvement on 1st July, 2002. He further incurred ₹ 4,00,000 on 1st July, 2013 for improvement. The house was sold by him on 1st July, 2020 for ₹ 2,00,00,000. He his entitled to deduction u/s 80C of ₹ 1,00,000. Compute the total income of Rahim for the A.Y. 2021-22 assuming that Rahim opted for section 115BAC. (Cll 2001- 02=100, 2002-03=105, 2013-14=220).

(A)₹ 1,79,90,730

(B)₹ 1,78,90,730

(C)₹ 1,91,00,000

(D)₹ 1,84,40,270

The Apex Court in case of CIT vs. Equinox Solutions Pvt. Ltd, (2017) 393 ITR 563 has held that the sale of a running business with all its assets and liabilities would be covered as ---------- under the Income-tax Act, 1961 for the purpose of tax thereon.

(A)Normal sale

(B)Slump sale

(C)Transfer of business

(D)Conversion of business

Tax as per provisions of Income Tax Act, 1961 is charged both on revenue and capital receipts by taking them as income. Find and state from the following items of receipts, which is specifically not included in the income :

(A)Sum received under an agreement for not carrying out any activity in relation to any profession.

(B)Fair market value of inventory which is converted into capital asset.

(C)Amount of subsidy received which is taken into account for determination of the actual cost of the depreciable asset.

(D)Compensation received by a person in connection with termination of his employment.