Guide to .. Tax Management ,Tax Planning and Tax Saving

Cost of Acquisition of Goodwill [Section-55(2)(a)] for Computing Capital Gain


in case goodwill was purchased, the cost shall be the price paid but in case it was not purchased the cost is taken as NIL.

The Finance Act 1994 has amended the above provision in following manner

(a)        In case the capital asset is goodwill, tenancy rights, stage carriage permits or loom hours the cost of acquisition will be

(i)          purchase price, if such asset was purchased and

(ii)        NIL in all other cases except those covered u/s 49 (1) (1) to (iv).

(aa)      In case a person is holding shares or other securities and assessee becomes entitled to subscribe to an additional financial asset, the cost of such additional asset shall be :

(i)         Cost of original asset shall be its purchase price paid.

(ii)        Incase such right to subscribe is renounced in favour of some other person, the cost of such renounced right is taken as NIL.

(iii)       In case assessee subscribes to such additional asset, the amount actually paid shall be its cost.

(iv)       In case asset is acquired by renouncee the cost shall be price paid by him to renouncee and amount paid to the company or institution for such renounced asset.

(v)        With effect from assessment year 1998-99 the above mentioned provisions relating to cost of goodwill have been made applicable to a right to manufacture, produce or process any article or thing.

Adoption of Fair Market Value [Section 55(2)(b) and (c)]

(i)         Where the asset became the property of the assessee before 1st April 1981, it will mean the cost of acquisition of the asset to the assessee or the fair market value of the asset on 1st April 1981, at the option of the assessee. Assesse should adopt whichever of the two is higher.

(ii)        Where the capital asset becomes the property of the assessee under any of the modes given in section 49, the assessee is given the option to adopt, either the cost of the asset to the previous owner or its fair market value as on 1-4-1981, whichever is higher.


More Topics ... @ ' Capital Gain's

Capital Gain , Capital Assets & Property for Computing Capital Gain
Types of Capital Assets for Computing ‘Capital Gain’
Types of Capital Gains for Computing ‘Capital Gain’
Computation Of ‘Period Of Holding
 Transfer Of A Capital Asset [Section-2(47)]
Transactions Not regarded as ‘Transfer’ [Section-47]
Capital Gain is Deemed to be the Income of the Previous Year
Amount Received from insurer [Section-45(1A)] for Computing Capital Gain
Transfer of Capital Assets by a person to firm, AOP or Body Of Individuals (BOI) [Section 45(3)] for Computing Capital Gain
 Enhancement of Compensation on Compulsory Acquisition of Assets [Section-45(5)] for Computing Capital Gain
Sale of units Purchased for Deduction U/s 80 CCB [Section-45(6)]
Distribution of Assets by A Company in Liquidation for Computing Capital Gain
Capital Gain on Purchase by A Company of its Own Shares or Other  Securities [Section 46A]
Method of Computing Capital Gain [Section 48]
Expenses Disallowed u/s Section 48 for Computing Capital Gain
Cases in which the Indexation of Cost is not to be done while Calculating long Term Capital Gain
 Computation of Capital Gain in Case of Non-Residents [Sec. 48 Proviso 1 ]
Determination of Cost of Acquisition for Computing Capital Gain.
Taxation of Gain on ‘Slump Sale’ for Computing Capital Gain

Special Provision for full Value of Consideration in certain cases (Section 50C] for Computing Capital Gain
Treatment of Advance Money Received and Forfeited (Section-51] for Computing Capital Gain
Cost of Acquisition of Goodwill [Section-55(2)(a)] for Computing Capital Gain
Cost of Acquisition of Shares [Section 55 (2) (v)] for Computing   Capital Gain
Capital Gains Exempted u/s 10
Capital Gains—Exempted u/s 54
 Capital Gain on Transfer of Self-Cultivated Agricultural Land in Urban   Areas [ Section 54 B]
Capital Gains on Compulsory Acquisition Of Land And Buildings [Section 54D]
 Capital Gain on Transfer of any Long Term Capital Asset [Section-54EC]
Exemption of Capital Gain on Transfer Of Long-Term Capital Assets in case of Investment In Residential House [Section 54F]
Capital Gain on Shifting of Industrial Undertaking from Urban Areas to Non-Urban Areas [Section 54G]
 Exemption of Capital Gain on transfer of assets in case of shifting of Industrial Undertaking from an urban area to any Special Economic Zone (SEZ) [Sec. 54GA]
Long term Capital Gain on Transfer of Residential Property if Net Consideration is Invested in the Equity Shares of an Eligible company [Section 54GB] [w.e.f. A.Y. 2013- 14 but upto A.Y. 201 7-1 8]
Reference to Valuation Officer [Section 55] towards Capital Gain

Get.. Tally.ERP9 Book + GST Practical Assignment @ Rs.550 Tally.ERP9 Book Online Order Tally.ERP9 Book Content
© 2018 : IncomeTaxManagement.Com