Re: [aaykarbhavan] Query regarding Capital Gain relating to Exchange of Property

 "Transfer" for the purpose of capital gains tax under the I.T.Law.Sec.2(47) of the I.T.Act,1961.

 

It defines the word "transfer" in relation to a capital asset for the purpose of capital gains tax and for this purpose "transfer" includes:-"The sale,exchange or relinquishment of the asset".

 

Hence, the exchange also subject to capital gain tax. The consideration for the exchange will be adopted one of the higher value of the two assets.

 

Thanks & regards,

Rao

 

On Mon, Dec 30, 2013 at 7:16 PM, SOUMYA JYOTI mitra <sjmrng29@yahoo.co.in> wrote:

 

My client got the land of Rs.2 crore in exchange of shares , he was holding,  fair market value of Rs. 1.80crore.

Where the transfer is by way of EXCHANGE of one asset for another , fair market value of asset received ( here it is land) is the Full value of consideration , so Full value of consideration is  2 crore .

Where the asset acquired by way of exchange of another asset the cost of acquisition is fair market value of such other asset ( here it is share) , so cost of acquisition is 1.80 crore.

Am I correct or I am missing something. Hope u won't mind.

On Monday, 30 December 2013 5:52 PM, 48945 CA.CHITRANJAN BHARADIA <chitranjan@icai.org> wrote:

 

when it is trasnfered ( property or shares) then it is sale (transfer) and not exchange, as in accounting there is no value of exchange, when property or shares are transferred, it is sale and consideration will be the same, as i mentioned earlier.

 

Thanks with Best Regards

 

CA Chitranjan Bharadia

 

On Sat, Dec 28, 2013 at 6:07 PM, Dipak Shah <djshah1944@yahoo.com> wrote:

 

u r active in this group. Three days back I was in your building. I was in hurry. I could not meet you. Next time I will come to your office.
Regards,
C A Shah D J

 

 

On Saturday, 28 December 2013 6:03 PM, 48945 CA.CHITRANJAN BHARADIA <chitranjan@icai.org> wrote:

 

It shares are held more than 12 months, there will be long term capital gain, and if it is shown that the same is invested in the house property, he can get benefit of section 54, however he needs to do trascantion by cheque. in your query cost of acquisation is Rs. 200.00 lacs and sale of consideration is 180.00 lacs

 

Thanks with Best Regards

 

CA Chitranjan Bharadia

On Fri, Dec 27, 2013 at 7:54 PM, <sjmrng29@yahoo.co.in> wrote:

 

My client WAS a promoter of a Pvt ltd. Co. and was holding 75% share( 2lac share) , fair market value is Rs.100/- per share  and Face value Rs.10/-per share , This year he transferred 1.80 lac   share to Mr. X. , fair market  value of which is 1.80 cr. But  Mr.X gave him land , registered value of the land  is 2 crore. , no transaction of cash taken place ,--Now my question is --------

(1)     Can this transfer be considered as EXCHANGE for capital gain tax ? If so what will be the cost of acquisition and Value of  sale consideration  ?

(2)    If it can not be considered as EXCHANGE then What will be the cost of acquisition and Value of sale consideration  ?

--
CA. K. Subrahmanyeswara Rao,
Rama Subba Rao & Co,
Chartered Accountants 
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