Budget 2017 - 18: Shifting base year from 1981 to 2001 for computation of capital gains..!
The existing provisions of section 55 provide
that for computation of capital gains, an assessee shall be allowed deduction
for cost of acquisition of the asset and also cost of improvement, if any .
However, for computing capital gains in respect of an asset acquired before
01.04.1981, the assessee has been allowed an option of either to take the fair
market value of the asset as on 01.04.1981 or the actual cost of the asset as
cost of acquisition.
The assessee is also allowed to claim deduction for cost
of improvement incurred after 01.04.1981, if any . As the base year for
computation of capital gains has become more than three decades old, assessees
are facing genuine difficulties in computing the capital gains in respect of a
capital asset, especially immovable property acquired before 01.04.1981 due to
non-availability of relevant information for computation of fair market value
of such asset as on 01.04.1981.
In order to revise the base year for
computation of capital gains, it is proposed to amend section 55 of the Act so
as to provide that the cost of acquisition of an asset acquired before
01.04.2001 shall be allowed to be taken as fair market value as on 1st April,
2001 and the cost of improvement shall include only those capital expenses
which are incurred after 01.04.2001.
Consequential amendment is also proposed
in section 48 so as to align the provisions relating to cost inflation index to
the proposed base year.
These amendments will take effect from 1st April,
2018 and will, accordingly, apply in relation to the assessment year 2018-19
and subsequent years.
[Clauses 28 & 24]
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