CA SHIRISH VYAS / C.A.

FINAL / IMP DT QUESTIONS

CAPITAL GAINS
Question 1:
Ms Yuvika bought a vacant land for ` 80 lakhs in May 2005.
Registration and other expenses were 10% of the cost of land. She
constructed a residential building on the said land for ` 100 lakhs
during the financial year 2007-08.
She entered into an agreement for sale of the above said
residential house with Mr. Johar in April 2015. The sale
consideration was fixed at ` 700 lakhs and on 23-4-2015, Ms Yuvika
received ` 20 lakhs as advance in cash by executing an agreement.
However, due to failure on part of Mr. Johar, the said negotiation
could not materialise and hence, the said amount of advance was
forfeited by Ms Yuvika.
Ms Yuvika, again entered into an agreement on 01.08.2023 for sale
of this house at ` 810 lakhs. She received ` 80 lakhs as advance by
RTGS. The stamp duty value on the date of agreement was ` 890
lakhs. The sale deed was executed and registered on 14-1-2024 for
the agreed consideration. However, the State stamp valuation
authority had revised the values, hence, the value of property for
stamp duty purposes was ` 900 lakhs. Ms Yuvika paid 1% as
brokerage on sale consideration received.
Subsequent to sale, Ms Yuvika made following investments:
(i) Acquired two residential houses at Delhi and Chandigarh
for ` 130 lakhs and ` 50 lakhs, respectively, on 31.1.2024 and
15.5.2024
(ii) Acquired a residential house at UK for ` 180 lakhs on
23.3.2024.
(iii) Subscribed to NHAI capital gains bonds for ` 50 lakhs on 29-
3-2024 and for ` 40 lakhs on 12-5-2024.
Compute the income under the head 'Capital Gains' of Ms Yuvika.
Cost Inflation Index:
F.Y. 2005-06 – 117; F.Y. 2007-08 – 129; F.Y. 2023-24 - 348.

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
Answer 1:
COMPUTATION OF CAPITAL GAINS [PY 2023-24]
` (lakhs)
Full Value of Consideration (Actual SP–Note 1) 810
Less: Transfer Expenses - 8.10
Net Consideration 801.90
Less: Indexed Cost of Acquisition
88 lakhs x 348 Trf. - 261.74
117 Pur.
100 lakhs x 348 Trf. - 269.77
129 Pur.
Gross LTCG 270.39
Less: Exempt u/s 54: - 130
Amount of CG 270.39 L
Cost of New Asset (CNA) / Deposit 130 L
140.39
Less: Exempt u/s 54EC: - 50
Amount of CG 140.39 L
Cost of New Asset (CNA) 90 L
Maximum 50 L
Net LTCG 90.39
Note 1:
SDV as on the date of agreement ₹ 890 lakhs
SDV as on the date of registration ₹ 900 lakhs
As per sec.50C, if part or whole of the consideration is received by
account payee cheque/draft/ECS on or before the agreement date
then SDV on agreement date i.e. ₹ 890 lakhs should be considered.
As per sec. 50C, if the actual sale price is less than the SDV and if
the difference is not more than 10% of actual sale price then
SDV is ignored.
SDV ₹ 890 lakhs
Actual SP ₹ 810 lakhs
Difference 80 lakhs < 10% of Actual SP i.e. ₹ 81 lakhs
Since the difference is not more than 10%, SDV is ignored and the
FVOC = Actual SP
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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
Question 2:
Tani purchased a land at a cost of ₹35 lakhs in the financial year
2004-05 and held the same as her capital asset till 31 May, 2019.
Tani started her real estate business on 18 June, 2019 and
converted the said land into stock-in-trade of her business on the
said date, when the fair market value of the land was ₹210 lakhs.
She constructed 15 flats of equal size, quality and dimension. Cost
of construction of each flat is ₹10 lakhs. Construction was
completed in January, 2024. She sold 10 flats at ₹30 lakhs per flat
in January, 2024. The remaining 5 flats were held in stock as on
31st March, 2024.
She invested ₹50 lakhs in bonds issued by National Highway
Authority of India on 31st March, 2024 and another ₹50 lakhs in
bonds of Rural Electrification Corporation Ltd. in April, 2024.
Compute the amount of capital gain and business income in the
hands of Tani arising from the above transactions for AY 2024-25.
Cost Inflation Index: FY 2004-05: 113; FY 2019-20: 289; FY 2023-
24:348.
Answer 2:
COMPUTATION OF CAPITAL GAINS [PY 2023-24]
` (lakhs)
Full Value of Consideration 2,10,00,000
(FMV on the date of conversion)
Less: Transfer Expenses ----
Net Consideration 2,10,00,000
Less: Indexed Cost of Acquisition
35 lakhs x 289 Trf. - 89,51,327
113 Pur.
1,20,48,673
Gross LTCG taxable in PY 2023-24 80,32,448
[₹1,20,48,673 x 2/3]
Less: Exempt u/s 54EC: - 50,00,000
Amount of CG 80,32,448
Cost of New Asset (CNA) 1,00,00,000
Maximum 50,00,000
Net LTCG -130.39

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
COMPUTATION OF BUSINESS INCOME [PY 2023-24]
Particulars ₹
Sale price of flats [10 x ₹30 lakhs] 3,00,00,000
Less: FMV on the date of conversion [₹210 L x 2/3] 1,40,00,000
Less: Cost of construction of flats [10 x ₹10 lakhs] 1,00,00,000
Taxable Business income 60,00,000
Notes:
(1) Normally, capital gains is taxable in the year of transfer.
However, as per section 45(2), the capital gains arising from
the transfer by way of conversion of capital assets into stock-
in-trade will be chargeable to tax only in the year in which
the stock-in-trade is sold.
(2) In case of conversion of capital asset into stock-in-trade and
subsequent sale of stock-in-trade, the period of 6 months is
to be reckoned from the date of sale of stock-in-trade for the
purpose of exemption under section 54EC [CBDT Circular
No.791 dated 2.6.2000]. In this case, since the investment in
bonds of NHAI has been made within 6 months of sale of
flats, the same qualifies for exemption under section 54EC.

Question 3:
Mr. Adarsh sold his residential property on 22nd March, 2024 for
95 lakhs and paid brokerage @ 1% of sale price. He had purchased
the said property in August 2004 for 27,36,000. In July, 2024, he
invested 78 lakhs in equity of TMN (P) Ltd., an eligible start- up
company (set up on 1st March, 2024), which constituted 29% of
share capital of the said company. TMN (P) Ltd. utilized the said
sum for the following purposes —
(a) Purchase of New P & M during August 2024 - ₹66 lakh
(b) Included in (a) above is ₹8 lakhs for purchase of car
(c) Air-conditioners purchased for ₹1 lakh, included in the (a)
above, were installed at the residence of Mr. Adarsh.
(d) Amt. deposited in specified bank on 18.9.2024 - `12lakh
Compute the taxable capital gain for the A.Y.2024-25. Assume that
Mr. Adarsh is liable to file his return of income on or before 31st
Oct., 2024. Cost Inflation Index: 2004-05: 113, 2023-24: 348.
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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
Answer 3:
COMPUTATION OF CAPITAL GAINS
Particulars `
Full Value of Consideration 95,00,000
Less: Transfer Exps. (1% of the gross consideration) - 95,000
Net consideration 94,05,000
Less: Indexed cost of acquisition - 84,25,912
(` 27,36,000 x 348/113)
Gross LTCG 9,79,088
Less: Exemption under section 54GB - 7,18,310
Gross LTCG x Cost of New Asset/Net Consideration
= ` 9,79,088 × ` 69,00,000/94,05,000
Net LTCG 2,60,778
Note 1:
For exemption under section 54GB,
Cost of New Asset = Cost of new plant and machinery
Particulars ` `
Cost of New P & M acquired in Aug., 2024 66,00,000
Less: Cost of vehicles, i.e., cars 8,00,000
Cost of A/c installed at the residence 1,00,000 - 9,00,000
57,00,000
Deposit in Capital Gains Account Scheme 12,00,000
69,00,000

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
Question 4:
Calculate the amount chargeable to tax under the head 'Capital
Gains' and also calculate tax on such gains for A.Y. 2024-25 from
the following details provided by Mr. Naveen with respect to sale
of certain securities during F.Y. 2023-24, assuming that the other
incomes of Mr. Naveen exceed the maximum amount not
chargeable to tax. (Ignore surcharge and cess):
(i) Sold 10,000 shares of Y Ltd. on 05-04-2023 @ ` 650 per share
Y Ltd. is a listed company. These shares were acquired by Mr.
Naveen on 05-04-2016 @` 100 per share. STT was paid both
at the time of acquisition as well as at the time of transfer of
such shares which was affected through a recognized stock
exchange. On 31-01-2018, the shares of Y Ltd. were traded
on a recognized stock exchange as under: Highest price - `
300 per share, Average price - ` 290 per share Lowest price
- ` 280 per share
(ii) Sold 1,000 units of AB Mutual Fund on 20-05-2023 @` 50
per unit. AB Mutual Fund is an equity oriented fund. These
units were acquired by Mr. Naveen on 10- 03-2017 @ ` 10
per unit. STT was paid only at the time of transfer of such
units. On 31- 01-2018, the Net Asset Value of the units of AB
Mutual Fund was ` 55 per unit. The units of AB Mutual Fund
were not listed on the stock exchange as on 31.1.2018.
(iii) Sold 100 shares of C Ltd. on 27-09-2023 @ ` 200 per share.
C Ltd. is an unlisted company. These shares were issued by
the company as bonus shares on 30-09-1997. The Fair
Market Value of these shares as on 01-04-2001 was ` 50
per share.
Cost Inflation Index for various financial years are as under:
2001-02 100
2016-17 264
2017-18 272
2020-21 301
2023-24 348

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
Answer 4:
COMPUTATION OF CAPITAL GAINS [Sec. 112A] [Shares of Y ltd.]
Amt.
FVOC (SP) (10,000 x ₹ 650) 65,00,000
Less: COA* (10,000 x ₹ 300) - 30,00,000
LTCG 35,00,000
*COA
FMV (31/1/18) – Highest Trading Price 300
SP 650
Lower 300
Actual Cost 100
Higher (COA) 300

COMPUTATION OF CAPITAL GAINS [Sec. 112A] [Units of MF]

Amt.
FVOC (SP) (1,000 x ₹ 50) 50,000
Less: COA* (1,000 x ₹ 50) - 50,000
LTCG Nil
*COA
NAV (31/1/18) 55
SP 50
Lower 50
Actual Cost (Higher of ₹130 or ₹900) 10
Higher (COA) 50

COMPUTATION OF CAPITAL GAINS [Unlisted shares of C ltd.]

`
Full Value of Consideration (100 shares x SP ₹200) 20,000
Less: Transfer Expenses ---
Net Consideration 20,000
Less: Indexed Cost of Acquisition (17,400)
Nil x 348 Trf.
5,000 100 Pur.
Less: Indexed Cost of Improvement ---
Long Term Capital Gains 2,600

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
 Tax payable:
Tax on LTCG u/s 112A = 10% of (35 lakhs – 1 lakh) 3,40,000
Tax on LTCG u/s 112 = 20% of 2,600 520
Total Tax Payable 3,40,520

Question 5:
Mr. Riyaan owned a residential house in Noida. It was acquired on
09.09.2014 for ` 30,00,000. He sold it for ` 1,57,00,000 on
07.01.2021.
Mr. Riyaan utilized the sale proceeds of the above property to
acquire a residential house in Panchkula for ` 2,05,00,000 on
20.07.2021. The said house property was sold on 31.10.2023 and
he purchased another residential house in Delhi for ` 2,57,00,000
on 02.03.2024. The property at Panchkula was sold for `
3,25,00,000.
Calculate capital gains chargeable to tax for the assessment year
2021-22 and 2024-25. All workings should form part of your
answer: Cost inflation index for various financial years are as under:
2014-15 240
2020-21 301
2021-22 317
2023-24 348

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
Answer 5:

COMPUTATION OF CAPITAL GAINS [PY 2020-21]

(Sale of Noida House)
`
Full Value of Consideration 1,57,00,000
Less: Transfer Expenses -----
Net Consideration 1,57,00,000
Less: Indexed Cost of Acquisition (37,62,500)
30 lakhs x 301 Trf.
240 Pur.
Gross LTCG 1,19,37,500
Less: Exempt u/s 54: - 1,19,37,500
Amount of CG 1,19,37,500
Cost of New Asset (CNA) 2,05,00,000
Net LTCG Nil

COMPUTATION OF CAPITAL GAINS [PY 2023-24]

(Sale of Panchkula House)
`
Full Value of Consideration 3,25,00,000
Less: Transfer Expenses -----
Net Consideration 3,25,00,000
Less: [Reduced] Indexed Cost of Acquisition (93,99,842)
(205 lakhs - 1,19,37,500) x 348 Trf.
317 Pur.
Gross LTCG 2,31,00,158
Less: Exempt u/s 54: - 2,31,00,158
Amount of CG 2,31,00,158
Cost of New Asset (CNA) 2,57,00,000
Net LTCG Nil

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
Question 6:
Determine the capital gains/loss and tax liability as per sec.115BAC
in the following scenarios for the A.Y. 2024-25 assuming the
assessees does not have any other source of income:
(i) On 12th December, 2023, 1,200 shares of X Ltd., a listed
company are sold by Mr. Vishal, a non-resident, @ ` 1,550
per share and STT was paid at the time of sale of shares.
These shares were acquired by him on 25th May, 2017 @ `
425 per share by paying STT at the time of purchase. The
price at which these shares were traded in National Stock
Exchange on 31st January, 2018 is as follows –
Particulars Amount in `
Highest Trading Price 680
Average Trading Price 610
Lowest Trading Price 540
(ii) Mr. Kabir, a resident aged 45 years, is the owner of
residential house which was purchased on 1st August, 2021
for ` 19,00,000. He sold the said house on 25th September,
2023 for ` 27,50,000. Valuation as per stamp valuation
authorities was ` 28,50,000 as on the date of sale. CII – 2021-
22: 317; 2023-24: 348

Answer 6:
 Mr. Vishal:
COMPUTATION OF CAPITAL GAINS [Sec. 112A] [Shares of X ltd.]
Amt.
FVOC (SP) (1,200 x ₹ 1,550) 18,60,000
Less: COA* (1,200 x ₹ 680) - 8,16,000
LTCG 10,44,000
*COA
FMV (31/1/18) – Highest Trading Price 680
SP 1,550
Lower 680
Actual Cost 425
Higher (COA) 680

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
 Tax payable:
Tax on LTCG u/s 112A = 10% of (10,44,000 – 1 lakh) 94,400
Add: HEC @4% +3,776
Tax Payable (rounded off) 98,180
Since the assessee is Non-resident, benefit of unexhausted basic
exemption is not allowed.

 Mr. Kabir
COMPUTATON OF CAPITAL GAINS
FVOC
1) Actual 27,50,000
2) SDV 28,50,000 27,50,000
Since difference between SDV and actual amt. is
within limit of 10%, we take FVOC as the Actual
Sale Price
Less: Trf. Expenses ----
27,50,000
Less: Indexed COA [19,00,000 x 348/317] - 20,85,804
LTCG 6,64,196

 Tax payable:
Tax on LTCG u/s 112 = 20% of (6,64,196 – 3 lakhs) 72,839
Less: Rebate u/s 87A (since NTI is upto 7 lakhs) - 25,000
47,839
Add: HEC @4% +1,914
Tax Payable (rounded off) 49,750
Since the assessee is Resident, benefit of unexhausted basic
exemption is allowed.

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
Question 7:
PQR Limited has two units – one engaged in manufacture of
computer hardware and the other involved in developing
software. As a restructuring drive, the company has decided to sell
its software unit as a going concern by way of slump sale for ₹385
lacs to a new company called S Limited, in which it holds 74%
equity shares. The balance sheet of PQR limited as on 31st March
2024, being the date on which software unit has been transferred,
is given here under -
Balance Sheet as on 31.3.2024 (₹ in lacs)
Liabilities ₹ Assets ₹
Paid up Share Capital 300 Fixed Assets
General Reserve 150 Hardware unit 170
Share premium 50 Software unit 200
Revaluation Reserve 120 Debtors
Current Liabilities Hardware unit 140
Hardware unit 40 Software unit 110
Software unit 90 Inventories
Hardware unit 95
Software unit 35
750 750
Additional information:
(i) The Software unit is in existence since May, 2015.
(ii) Fixed assets of Software unit includes land which was
purchased at ₹40 lacs in the year 2008 and revalued at ₹60
lacs as on March 31, 2024. The stamp duty value on
31.3.2024 is ₹55 lakhs.
(iii) Other Fixed assets of software unit are reflected at 140 lakhs
(` 200 lakhs less ` 60 lakhs, being the value of land) which
represents written down value of depreciable assets as per
books of account. However, the written down value of these
assets under section 43(6) of the Income-tax Act, 1961 is `
90 lakhs.
(a) Ascertain the tax liability, which would arise from slump sale
to PQR Limited, assuming it does not opt for sec. 115BAA.
(b) What would be your advice as a tax-consultant to make the
restructuring plan of the company more tax-savvy, without
changing the amount of sale consideration?

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
Answer 7:
(a)
COMPUTATION OF CAPITAL GAINS [Sec. 50B]
[Slump Sale of Software Unit]
FVOC (SP) (Note) 385 L
Lumpsum Consideration 385 L
FMV as per Rule 11UAE – Note 1 250 L
Less: Trf. Expenses -
385 L
Less: Cost of undertaking (Net Worth – Note 2) - 185 L
LTCG 200 L
The above capital gains is long term as the software unit started
in May 2015 and it is transferred on 31st March, 2024.

Note 1: FMV as per Rule 11UAE:

FMV of Jewellery, Artistic Work, Shares and Securities Nil
SDV of Immovable Property [Land] 55 L
Book Value of Other Assets 285 L
(Other FA 140 L + Drs. 110 L + Inventories 35 L)
Less: Book Value of Outside Liabilities (90 L)
250 L

Note 2: Net Worth [Cost of undertaking]:

WDV of Depreciable assets as per I.Tax 90 L
Book Value of Other Assets
- Land 40 L
- Stock 110 L
- Other Assets 35 L
Less: Book Value of Outside Liabilities (90 L)
185 L
Note: Indexation benefit is not available in case of slump sale

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
(b) TAX ADVICE:
(i) Transfer of any capital asset by a holding company to
its 100% Indian subsidiary company is exempt from
capital gains under section 47(iv). Hence, PQR Limited
should try to acquire the remaining 26% equity shares
in S Limited then make the slump sale in the above
said manner, in which case the slump sale shall be
exempt from tax. For this exemption, PQR Limited will
have to keep such 100% holding in S Limited for a
period of 8 years from the date of slump sale,
otherwise the amount exempt would be deemed to
be income chargeable under the head "Capital Gains"
of the previous year in which such transfer took
place.
(ii) Alternatively, if acquisition of 26% share is not feasible,
PQR Limited may think about demerger plan of
Software Unit to get benefit of section 47(vib) of
Income-tax Act, 1961.

Question 8:
Ms. Mishika has entered into an agreement with M/s CVM Build
Limited on 25.04.2020 in which she agrees to allow such
Company to develop a shopping mall on land owned by her in
New Delhi. She purchased such land on 05.05.2012 for `
15,00,000. In consideration, M/s CVM Build Limited will provide
20% share in shopping mall to Mishika. The certificate of
completion of shopping mall was issued by authority as on
26.12.2023. On such date, Stamp duty value of shopping mall was
` 4,14,00,000. Subsequently on 18.03.2024, she sold her 15%
share in shopping mall to Mr. Ketav in consideration of ` 65,00,000.
Cost Inflation Indices: 2023-24: 348, 2020-21: 301, 2012-13: 200
Compute the chargeable capital gains for the assessment year
2024 -25.

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
Answer 8:
COMPUTATION OF CG [Land] [Sec. 45(5A)] (PY 2023-24)
`
Monetary Consideration Nil
SDV of his share in the project [414 L x 20%] 82,80,000
Full Value of Consideration 82,80,000
Less: Transfer Expenses -----
Net Consideration 82,80,000
Less: Indexed Cost of Acquisition (22,57,500)
15 Lakhs x 301 Transfer* [2020-21]
200 Pur.
Long Term Capital Gains 60,22,500
* Year of trf. is the year when possession of land is
handed over to the builder.
Year of tax = Year of Completion certificate i.e. PY 2023-24.
COMPUTATION OF CG [15% Shopping Mall] (PY 2023-24)
`
Full Value of Consideration 65,00,000
Less: Transfer Expenses -----
Net Consideration 65,00,000
Less: Cost of Acquisition (414 Lakhs x 15%) (62,10,000)
Short Term Capital Gains 2,90,000

Question 9:
PQR Ltd. is a company in which the whole of its share capital was
held by LMN Ltd. Both PQR Ltd. and LMN Ltd. are Indian
companies. PQR Ltd. had made investment in shares Of Berkley
Ltd. in 1992 for 7,00,000 which it sold to LMN Ltd. on April 1, 2010
for a consideration of 42,00,000. The fair market value of these
shares of Berkley Ltd., as on April 1, 2001 is 32,00,000. LMN Ltd.
disinvested 7% of the shares held by it in PQR Ltd., in November
2023 by sale to public. It sold the shares in Berkley Ltd. acquired by
it from PQR Ltd. in February, 2024 for a sum of 95,00,000. Examine
the capital gains tax effect of these transactions in the hands of
PQR Ltd. and LMN Ltd. in the relevant assessment years, presuming
that the shares of Berkley Ltd. are unlisted shares. The cost inflation
index for the F.Y.2010-11 is 167 and F.Y.2023-24 is 348.
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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
Answer 9:
(i)
Sale of shares of Berkley Ltd. by PQR to LMN on 1.4.2010:
Since LMN Ltd. is an Indian company which holds 100% of shares
of PQR Ltd., the transfer of capital asset, namely, shares of Berkley
Ltd., by PQR Ltd. to LMN Ltd. would not be treated as a transfer u/s
47. Hence, no capital gains tax would have been attracted on such
transfer in the hands of PQR Ltd.
(ii)
Disinvestment by LMN Ltd, of 7% shares in PQR Ltd in Nov,23:
As per section 47A(1), where a holding company ceases to hold
100% of shares of the subsidiary company before the expiry of a
period of eight years from the date of transfer of capital asset, the
amount of capital gains exempted at the time of transfer would be
deemed to be income chargeable under the head "Capital gains"
of the previous year in which such transfer took place. However,
in this case, the above deeming provision would not apply because
the eight-year period from the date of transfer expires on
31.3.2018 and the disinvestment by LMN Ltd. of 7% shares held in
PQR Ltd. was in November, 2023.
(iii)
Sale of shares of Berkley Ltd. by LMN Ltd. in February 2024:
This transaction would attract capital gains tax in the hands of LMN
Ltd. for the A.Y.2024-25. The capital gains would be long-term,
since the period of holding is more than 24 months.
The cost of acquisition to PQR Ltd. in the year 1992 (i.e., ` 7 lakhs)
or the FMV as on 1.4.2001 (` 32 lakhs), whichever is higher, would
be deemed as the cost of acquisition in the hands of LMN Ltd.
COMPUTATION OF CAPITAL GAINS (for LMN Ltd.)
Particulars `
Full Value of Consideration (SP) 95,00,000
Less: Indexed cost of acquisition - 1,11,36,000
(` 32,00,000 × 348/100)
Long-term Capital Loss (16,36,000)

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
Question 10:
Mr. Sanjay is a resident in India aged 55 years. He had an
impressive investment portfolio in various mutual funds.
He redeemed his entire mutual fund investment portfolio and
bought a villa in Lonavala for ` 2.00 crores to spend rest of his life
there. The details of mutual funds are as under –
S. Type of mutual Date of Date of Amount Amount
No. fund investment redemption invested redeemed
(in ` lakhs) (in ` lakhs)
1 BLR growth fund 03.04.2020 05.06.2023 120 140
2 ABC Strategic fund 04.05.2023 02.02.2024 46 50
3 ABD Midcap fund 02.12.2022 05.07.2023 115 118
4 SBA Growth fund 08.11.2021 12.12.2023 110 120
The funds stated at 1 and 2 have invested 30% of their proceeds in
equity shares of domestic companies and funds stated at 3 and 4
have invested 70% of their proceeds in equity shares of domestic
companies. The investment pattern of funds remained unchanged
over all the years. STT is paid at the time of acquisition and
redemption of mutual fund, wherever applicable.
You are required to compute the capital gains chargeable to tax in
the hands of Mr. Sanjay for A.Y. 2024-25. CII: 2020-21: 301;
2021-22: 317; 2022-23: 331; 2023-24: 348.

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Answer 10:

COMPUTATION OF CAPITAL GAINS [ABC Strategic Fund]

[</= 35% Equity– Pur. on/after 1/4/23 – Sp. MF] – Sec.50AA
` (lakhs)
Full Value of Consideration 50,00,000
Less: Transfer Expenses ----
Net Consideration 50,00,000
Less: Cost of Acquisition - 46,00,000
Always STCG [Slab Rates] 4,00,000

COMPUTATION OF CAPITAL GAINS [ABD Midcap Fund]

[>/= 65% Equity – EOF] – Sec.111A
` (lakhs)
Full Value of Consideration 1,18,00,000
Less: Transfer Expenses ----
Net Consideration 1,18,00,000
Less: Cost of Acquisition - 1,15,00,000
STCG [15% Tax] 3,00,000

COMPUTATION OF CAPITAL GAINS [SBA Growth Fund]

[>/= 65% Equity – EOF] – Sec.112A
` (lakhs)
Full Value of Consideration 1,20,00,000
Less: Transfer Expenses ----
Net Consideration 1,20,00,000
Less: Cost of Acquisition [Indexation not allowed] - 1,10,00,000
Gross LTCG 10,00,000
Less: Exemption u/s 54F: - 10,00,000
[fully exempt as the net consideration of
1.2 crores is fully invested in villa at Lonavala]
Net LTCG [10% Tax] Nil

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 CA SHIRISH VYAS / C.A. FINAL / IMP DT QUESTIONS
COMPUTATION OF CAPITAL GAINS [BLR Growth Fund]
[< 65% Equity – Debt fund] – Sec.112
` (lakhs)
Full Value of Consideration 1,40,00,000
Less: Transfer Expenses ----
Net Consideration 1,40,00,000
Less: Indexed Cost of Acquisition - 1,38,73,754
120 lakhs x 348 Trf.
301 Pur.
Gross LTCG 1,26,246
Less: Exemption u/s 54F: - 72,141
= Gross LTCG x Cost of New Asset/Net Cons..
= 1,26,246 x (2 cr. – 1.20 cr.)/1.40 cr.
Net LTCG [20% Tax] 54,105

SUMMARY
` (lakhs)
STCG [ABC Strategic fund] 4,00,000
STCG [ABD Midcap fund] 3,00,000
LTCG [BLR Growth fund] 54,105
LTCG [SBD Growth fund] Nil
Total Capital Gains 7,54,105

~~~~~~~~~~~~~

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