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Capital Gains & IOS – Practical Problems

Let's integrate everything! Handling Capital Gains and Other Sources together often happens in exam problems. Here are detailed practical scenarios.

Problem 1: Capital Gains (LTCG with Exemption)

Mr. A sold a residential house in Chennai on Jan 1, 2025 for ₹1,50,00,000.

  • Expenses on Transfer: ₹2,00,000.
  • Cost of Acquisition (May 2012): ₹40,00,000. (CII 2012-13: 200, 2024-25: 363).
  • He purchased a new house in Hyderabad on Mar 1, 2025 for ₹50,00,000.
  • He also deposited ₹20,00,000 in Capital Gains Account Scheme (CGAS) before ITR due date.

Compute Taxable Capital Gain.

Solution:

Capital Gains Computation (Mr. A)

Sale Consideration₹1,50,00,000
Less: Less: Transfer Expenses(₹2,00,000)
Net Consideration₹1,48,00,000
Add: Less: Indexed Cost of Acquisition
Less: ₹40L × (363/200)(₹72,60,000)
Long-Term Capital Gain₹75,40,000
Add: Less: Exemptions u/s 54
Add: - New House Purchased₹50,00,000
Add: - Deposit in CGAS₹20,00,000
Less: - Total Exemption(₹70,00,000)
Taxable Long-Term Capital Gain₹5,40,000

(Note: Both Purchase and Deposit in CGAS qualify for Sec 54 exemption).

Problem 2: Income from Other Sources (Aggregation)

Ms. B gives following details for FY 2024-25:

  1. Family Pension: ₹90,000.
  2. Dividend from Indian Company: ₹20,000.
  3. Winnings from Lottery (Net after 30% TDS): ₹70,000.
  4. Gift from friend (Cash): ₹60,000.
  5. Interest on Bank FD: ₹10,000.

Compute Taxable Income from Other Sources.

Solution:

Income from Other Sources

1. Family Pension₹90,000
Less: Less: Deduction u/s 57 (1/3 or 15k) - 15k is lower(₹15,000)
Add: Taxable Pension₹75,000
Add: 2. Dividend Income (Fully Taxable)₹20,000
Add: 3. Lottery Winnings
Add: Gross Up: 70k * 100/70₹1,00,000
Add: 4. Gift from Friend (>50k, fully taxable)₹60,000
Add: 5. Interest on FD₹10,000
Total Income from Other Sources₹2,65,000

Problem 3: Section 54F (Proportionate Exemption)

Mr. C sold Gold Jewellery for ₹50,00,000 (Cost Indexed: ₹30,00,000).

  • LTCG: ₹20,00,000.
  • He bought a House for ₹40,00,000.
  • (Since asset sold is NOT house, Section 54F applies).

Condition for 54F: Invest Net Consideration, not just Gains.

  • Net Consideration: ₹50,00,000.
  • Invested: ₹40,00,000.
  • Exemption = LTCG × (Invested / Net Consid).
  • Exemption = 20L × (40L / 50L) = ₹16,00,000.

Taxable LTCG = 20L - 16L = ₹4,00,000.

Problem 4: Gift of Property (Section 56(2)(x))

Mr. D received a plot of land from his Uncle (Father's friend) for ₹10 Lakhs.

  • Stamp Duty Value: ₹12 Lakhs.
  • Is it taxable?

Analysis:

  1. Relation: Father's Friend is NOT a relative.
  2. Difference: SDV (12L) - Consideration (10L) = ₹2,00,000.
  3. Threshold 1: Is Diff > ₹50,000? Yes.
  4. Threshold 2: Is Diff > 10% of Consideration (1L)? Yes.
  5. Result: The difference of ₹2,00,000 is Taxable as Income from Other Sources.

Summary

  • Capital Gains: Remember INDEXATION for LTCG.
  • Exemptions: Sec 54 (Full) vs Sec 54F (Proportionate). CGAS deposit counts.
  • Other Sources:
    • Family Pension: Deduct ₹15k.
    • Lottery: Gross Up (Net × 100/70).
    • Gifts: Aggregation rule (>50k total) and Property difference rule.
    • Dividend: Fully taxable.

Quiz Time! 🎯

Test Your Knowledge

Question 1 of 4

1. Amount deposited in Capital Gains Account Scheme is:

Allowed as Exemption
Disallowed
Taxed separately
Treated as Income

Course Completed! 🎓 You have mastered B.Com Income Tax!

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