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MCQ Self Challenge #0089 on Cost of Acquisition & Period of Holding in the case of Gift

 

Cost of Acquisition & Period of Holding in the case of Gift

 

Dear Professional Seniors & Friends,
Warm Greeting!

Here is the Next post of #MCQ on concept based practical knowledge on Cost of Acquisition & Period of Holding in the case of Gift in a unique manner to be self answered by participants. The detailed answer of these MCQs shall be posted next day for the self assessment of the participants.

MCQ 89.1: Disha’s Father purchase a property worth Rs 50 Lakhs in 1990. Her father had spent Rs 10 lakhs on improvement in year 1998. At the time of marriage of Disha, her father gifted that property to Disha in year 2005 at which time fair market value of the property was Rs 75 Lakhs? She had spent Rs 20 lakhs on improvement in year 2008.The cost of acquisition & improvement for disha shall be?

A. Rs 50 Lakhs & Rs 10 Lakhs.
B. Rs 75 Lakhs & Rs 20 Lakhs.
C. Rs 50Lakhs & Rs 30 Lakhs.
D. Rs 75 Lakhs & Rs 30 Lakhs.

MCQ 89.2: What will be the period of holding in the above case if the property is sold out in year 2018?

A. 1990 – 2018.
B. 2005 – 2018.
C. 2001 – 2018.
D. None of the Above.

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CA Sanjay Kumar Agrawal
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Answer MCQ Self Challenge #0089

 

Dear Professional Seniors & Friends,

Warm Greetings!

 

This post of MCQ is on provisions relating to professional misconduct in relation to members generally.

 

Answer MCQ 89.1: C) Rs 50Lakhs & Rs 30 Lakhs.

Answer MCQ 89.2: A) 1990 – 2018.

 

Practical Analysis for MCQ 89.1:

  • Section 49 of the Income Tax Act provides for cost value in referemce to certain modes of acquisition.
  • Section 49(1)(ii) provides for cost where the capital asset became the property of the assessee under a gift or will.
  • The cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee.
  • Based on the above analysis, Correct answer to MCQ 89.1 : C) Rs 50 Lakhs & Rs 30 Lakhs.

 

Practical Analysis for MCQ 89.2:

  • Point (b) of Explanation 1 of Section 2(42A) provides for period of holding in the case of a capital asset which becomes the property of the assessee in the circumstances mentioned in sub-section (1) of section 49(that was discussed above in first question, e.g. – Gift)
  • In this case, the period for which asset was held by the previous owner shall be included.
  • Based on the above analysis, Correct answer to MCQ 89.2 : A) 1990 – 2018.

 

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different. Please do not treat this as professional opinion; you can definitely have your own opinion.)

 

Sincere Regards!

 

CA Sanjay Kumar Agrawal

Mobile: 9810116321

 

To access MCQ posts regularly, please Join Telegram Channel:
https://t.me/caSanjayKumarAgrawal

 

For All MCQ post please click on:

Webpage: http://www.casanjay.me/

Facebook: https://www.facebook.com/CA.Sanjay.K.Agrawal/

Linkedin: https://www.linkedin.com/in/ca-sanjay-kumar-agrawal/

 

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