CAPITAL GAINS

(P.Y 2021-2022 / A.Y 2022 -2023)

1. Mr Zahir purchases a house property for Rs.52,000 May 10, 1982. He gets the first floor of the
house constructed in 1987-88 by spending Rs.80,000. He dies on September 12, 1988. The
property was transferred to his spouse by his will. She spends Rs.60,000 and Rs.53,400 during
1999-2000 and 2005- 06 respectively for renewals/reconstruction of the property. Mrs. Zahir,
sells the house property for Rs.43,00,000 on March 15, 2022 (brokerage paid by Mrs. Zahir is
Rs.23,000). The fair market value of the houseon April 1, 2001 is Rs.3,20,000. Compute Taxable
Capital Gain for the Assessment Year 2022-23.

2. Mr Xavier and Mr Yuvaraj gives the following information:

X Y
Residential house property situated at Delhi Rs Rs.
Date of transfer 10-7-2021 19-09-2021
Date of purchase 6-10-2004 10-04-2003
Sale consideration 26,00,000 29,00,000
(Stamp duty value) (30,00,000) (35,00,000)
Cost of acquisition 3,74,000 7,50,000
Expenses on transfer 20,000 12,000
To get the exemption u/s 54, the following residential house
properties are purchased by them at Noida
Date of Purchase 20-12-2021 01-07-2021
Cost acquisition 24,00,000 32,00,000
They transfer their house properties at Noida as follows:
Sale consideration 44,00,000 33,70,000
Stamp duty value 46,40,000 32,20,000
Date of transfer 25-12-2023 20-5-2023

Find out the capital gain chargeable to tax in the hands of X for different assessment years.

3. Mr Waseem sells agricultural land situated within the municipal limits of Mumbai for Rs. 50,00,000
(stamp duty value on the basis of circle rate: Rs.38,75,000) on July 4, 2021, which was purchased
by him on March 1, 2007 for Rs.13,40,820. On July 15, 2022, he purchases agricultural land in rural
area for Rs. 4,30,000 and deposits Rs. 10,80,000 in a deposit account for availing exemption
U/s.54B. He purchases another agricultural land (situated within the limit of Delhi Municipal
Corporation) on 30-06-2023 for Rs. 8,47,000 by withdrawing from the deposit account. Amount
left in the deposit account is withdrawn on July 10, 2023. The agricultural land in rural area is
transferred on April 1, 2024 for Rs. 4,90,000 and the land in Delhi is transferred on July 17, 2024
for Rs. 8,70,000. Determine the amount of capital gains.
 CAPITAL GAINS
(P.Y 2021-2022 / A.Y 2022 -2023)
4. Uranus Co’ Ltd., a manufacturing company, purchases a factory building on May 6, 1998 for
Rs.20,00,000 (priorto this the company used the same building as a tenant for about 5 years). The
building is compulsorily acquired by the Government on April 20, 2021 for which a sum of
Rs.60,00,000 is paid as compensation on March 14, 2022. Compute the amount of capital gains
chargeable to tax for the assessment year 2022-23 taking into consideration the following information:
a. On 1st April, 2021 the company owns two buildings (rate of depreciation: 10 per cent) one of
which is acquired by the Government during 2021-22. The depreciated value of the block on
April 1, 2021 is Rs.21,35,000.
b. The company purchases a factory building on April 6, 2022 for Rs. 15,00,000. Does it make
difference if the factory building is purchased on March 31, 2022?

5. Velan sells the following long term capital assets on January 11, 2022:
Residential House
Particulars Gold Silver Diamond
Property
Sale consideration (Rs.) 7,80,000 16,20,000 5,92,000 12,80,400
Indexed Cost of Acquisition (Rs.) 1,40,000 2,30,000 3,56,000 8,60,000
Expenses on transfer (Rs.) 20,000 1,62,000 12,000 64,000

The due date for filing of return of income for the assessment year 2022-23 is July 31, 2022. For
claiming exemption under various sections, Mr. Velan purchases the following assets:
Assets Date of acquisition Amount (Rs.)
Land (for constructing a residential house) 02-04-2022 2,00,000
Bank deposit (for constructing house) 05-08-2022 1,00,000
Bonds of R E C (redeemable on 5-07-2028) 05-07-2022 15,00,000
Bonds of N H A I (redeemable on August 10, 2033) 10-07-2022 6,10,000
Find out the amount of capital gain chargeable for the assessment year 2022-23.

6. Terry and Steve give the following information (they do not own any residential house property):
Particulars Terry (Rs.) Steve (Rs.)
Date of transfer 10-05-2021 15-02-2022
Date of purchase 23-06-2003 18-06-2001
Sale consideration 36,55,000 13,14,000
Cost of acquisition 2,75,079 77,000
Expenses on transfer 55,000 14,000
To claim exemption u/s 54F, the following residential houses are purchased by them at Pune:
Date of Purchase 12-05-2021 03-01-2022
Cost of Acquisition 27,00,000 6,50,000
They transfer their House Properties at Pune:
Sale consideration (Rs.) 36,00,000 14,70,000
Date of Transfer 29-06-2023 01-01-2024
Find out the capital gain chargeable to tax for different assessment years.
 CAPITAL GAINS
(P.Y 2021-2022 / A.Y 2022 -2023)

7. Ramesh sells (non-listed) shares in a private company on July 10, 2021 for Rs.16,10,000 (cost of
acquisition on June 15, 2004: Rs.1,09,400 and expenses on sale is Rs.10,000). On July 10, 2021, he
owns one residential house property. To get the benefit of exemption, he deposits on May 30,
2022 Rs.12,00,000 in Capital Gains Deposit Account Scheme. By withdrawing from Deposit
Account, he purchases a residential house property at Delhi on July 6, 2023 for Rs.9,60,000.
Ascertain –
a. The amount of capital gain chargeable to tax for the assessment year 2022 – 2023;
b. Tax treatment of the unutilized amount;
c. When can he withdraw the unutilized amount; and
d. What should he do to ensure that the exemption u/s 54F is never taken back.

8. Mr Qadir purchased 1,000 (non-listed) shares in Y ltd on August 16, 2002 for Rs.32,760. On May
17, 2004, he gets 500 bonus shares. On October 20, 2014, he acquires 1,500 right shares for
Rs.25,024. He sells 3,000 (non-listed) shares in Y ltd on February 12, 2022, at the rate of Rs.110
per share (brokerage on sale: 1%). He owns one residential house property. He purchases a
residential house on June 29th, 2022 for Rs.5,80,000. Ascertain the amount of capital gains
chargeable to tax for the assessment year 2022-23.

9. Purushoth Ltd owns an industrial undertaking at Nagpur which is situated in urban area. As per
policy of the state Government, the industrial undertaking is shifted to a rural area. In the process
of shifting the company sells the following assets:

Plant &
Particulars Building Furniture Land
Machinery
Rate of depreciation 15% 10% 10% ---
Year of acquisition 1977 1978 1976 1975
WDV of the block on 1-4-2021 (Rs.) 9,50,000 10,75,000 25,000 ---
Cost of acquisition of land (FMV on --- --- --- 80,000
April 1, 2001: Rs. 2,45,000)
Sale proceeds (sale date - June 25, 47,92,000 88,90,000 17,32,000 45,00,000
2021) Rs.
Value for stamp duty purpose (Rs.) N.A. 80,00,000 N.A. 60,00,000
Cost of assets acquired during April-
May 2022 for the purpose of shifting 30,50,000 4,00,000 3,70,000 50,70,000
the undertaking to a rural area.

Assuming the industrial undertaking is transferred to rural area by June 15, 2022, ascertain the
capital gains chargeable to tax for the assessment year 20212-23. Does it make any difference if
the assets are acquired by March 31, 2022?
 CAPITAL GAINS
(P.Y 2021-2022 / A.Y 2022 -2023)

10. On April 1, 2021, Mr Oscar (63 years), a resident individual, owns two house properties of Agra
apart from investment in gold. During the previous year 2021-22, he sells the following assets:
Particulars Gold Residential HP at Agra
Date of Sale 10-07-2021 15-06-2021
Date of Purchase 09-06-2004 17-05-2008
Sale Consideration (Rs.) 12,40,000 32,00,000
Cost of Acquisition (Rs.) 3,30,000 14,00,000
His Income from other sources (including property income) is Rs.17,56,000. Assuming that he
makes the following investments during the PY 2021-22, find out his tax liability of for the AY
2022-23:
a. Purchase of a residential house property Rs. 6,22,000
b. Deposit in the public provident fund account Rs. 1,50,000

11. On July 30, 2020, Mr Nagarajan (31 years) sells the following assets:
Preference Preference Shares in C Ltd
Shares in A Ltd Shares in B Ltd (non-listed)
(listed) (listed)
Sale consideration (Rs.) 5,00,000 12,25,000 6,89,000
Cost of acquisition (Rs.) 75,000 4,00,000 80,000
Date of acquisition May 10, 2002 June 6, 2003 April 6, 2006
His Income from other sources is Rs. 8,86,000. X deposits Rs.1,50,000 in public provident fund.
Find out the net income and tax liability for the assessment year 2022-23.

12. Mr Michellin (44 years) is a resident individual. His taxable salary income (after standard
deduction) is Rs.9,40,000. He contributes Rs.1,50,000 to a recognized provident fund. During the
previous year 2021-22, he transfers the following assets:

a. On April 6, 2021, X transfers agricultural land situated in a village in Karachi (population of

the village is 6,000); sale consideration is Rs. 20,00,000 (cost of acquisition at the time of
purchase in 2020-21 was Rs.16,50,000).
b. On April 20, 2021, X transfers agricultural land situated in a village in Madhya Pradesh
(population ofthe village is 4,000); sale consideration is Rs. 26,00,000 (cost of acquisition at
the time of purchase in1984-85 was Rs.50,000.
c. On July 1,2021, X transfers debentures of A Ltd for Rs. 14,00,000. These debentures are
transacted in the National stock exchange cost of acquisition is Rs.11,00,000 (date of
acquisition April 1,2020).

Find out the net income and tax liability of X for the assessment year 2022-23, on the assumption
that he has invested Rs.1,00,000 in the bonds of National Highways Authority of India on June
30,2021.
 CAPITAL GAINS
(P.Y 2021-2022 / A.Y 2022 -2023)

13. On May 22, 2021 the Government of Punjab acquires a plot of land owned by X Ltd for constructing
police headquarters. On June 10, 2021, X Ltd receives Rs.17,60,000 as compensation (cost of
acquisition Rs. 2,45,000 in 1984; fair market value on April 1, 2001 is Rs. 2,10,000) Against the
award an appeal is filed by X Ltd and the High court by its order dated October 10, 2024 increases
the award to Rs. 24,00,000. The additional compensation of Rs. 6,40,000 is received by X Ltd on
December 20, 2024. The following investments are made by X Ltd;
Date of Investment Amt (Rs.)
July 15, 2021 7,37,200 Residential House Property
January 1, 2025 4,00,000 NHAI Bonds (Redeemable on Jan 15, 2038)
Assuming that income of X Ltd from other sources for the assessment years 2022-23 and 2025-
26 is Rs.50,000 and Rs. 1,20,000 respectively, determine the taxable income for the two assessment
years.

14. X sells a residential house at Delhi (no other house is owned by him) on March 20, 2022 for Rs.
11,00,000 (cost of acquisition in 2005 – 06 Rs.1,00,000) On July 31, 2022, he deposits Rs. 3,00,000
in a bank for purchase / construction of house property in future to claim exemption u/s 54. On
November 1, 2022, he purchases 10 bonds of Rs. 100 each of N H A I (not redeemable within 6
years) to claim exemption u/s 54EC. Income of X from other sources for the previous year 2021 –
22 is Rs. 60,000. He completes construction of a residential house property on March 1, 2025 (total
investment of Rs.1,90,000 is financed by withdrawing from deposit account). Assume that the
income of X from other sources for the previous year’s 2023-24 and 2024-25 is Rs.7,86,000 and
Rs.2,70,000 respectively, Determine the taxable income the assessment years 2022 –23, 2024 – 25
and 2025-26.

15. Mr.S converts his plot of land purchased in the year 2001-2002 for Rs.40,000 into stock-in-trade
on 31-3- 2008. The FMV on 31-3-08 is Rs. 1,80,000. The stock in trade is sold for Rs. 2,20,000 in
the month of January 2021. Find out the taxable income if any, and if so under which head of income
and for which assessment year?

16. Mr. X converts his capital asset (acquired on 10th June, 2002 for Rs.70,000) into stock in trade on
10th May, 2017 (F M V Rs. 4,80,000) and subsequently sells the stock in trade so converted for
Rs.18,00,000 on 20th July, 2021. Determine the amount of assessable profits.

17. X sells (non-listed) shares in companies on November 30,2019 for Rs. 9,00,000 (cost of acquisition
whenacquired on June 15,2018: Rs. 2,50,000) On May 1,2020, he invests Rs. 3,00,000 in bonds of
National Highways Authority of India(date of redemption : May1, 2030) for claiming exemption
u/s 54EC. On July 31,2021, he deposits Rs. 6,00,000 in a bank account for construction of a house
in future. Construction of the house is completed on October 15,2022. Total investment of Rs.
4,50,000 is financed by withdrawing from the deposit account. Income of X from other sources is
Rs.20,000 and Rs.30,000 for the previous year 2019-20 and 2022-23 respectively. Determine the
taxable income for the assessment year 2020-21 and 2023-24. X does not own any other house.
 CAPITAL GAINS
(P.Y 2021-2022 / A.Y 2022 -2023)

18. During the previous year ending on March 31, 2021,X sells the following assets:
Sale Cost of Year of purchase
Assets Date of sale
proceeds acquisition
Rural Agricultural land 15-06-2021 2,00,000 20,000 01-03-2002
Urban agricultural land 01-11-2021 6,00,000 30,000 10-05-2001
Shares (not listed) 15-01-2022 1,70,000 1,25,000 10-01-2017
Debentures listed at CSE 12-01-2022 40,000 20,000 10-01-2017

X ltd purchases the following assets:

Date of Purchase Assets Investment (Rs.)
10-07-2021 Agricultural land 2,00,000
01-08-2021 Rural Electrification Corporation Bonds 20,000
10-11-2021 Agricultural Bonds 4,00,000
15-11-2021 Residential house 90,000
14-07-2022 Bonds of NHAI (date of redemption July 20, 2029) 1,40,000
Determine the taxable income for the assessment year 2022-2023 on the assumption that
income frombusiness is Rs. 2,45,000.

COST INFLATION INDEX

S. No. FY CII S. No. FY CII
1 2001-02 100 12 2012-13 200
2 2002-03 105 13 2013-14 220
3 2003-04 109 14 2014-15 240
4 2004-05 113 15 2015-16 254
5 2005-06 117 16 2016-17 264
6 2006-07 122 17 2017-18 272
7 2007-08 129 18 2018-19 280
8 2008-09 137 19 2019-20 289
9 2009-10 148 20 2020-21 301
10 2010-11 167 21 2021-22 317
11 2011-12 184 22 2022-23 331