A acquired a capital asset at a cost of ₹ 70,000 and gifted the same to B, a relative, after one year.…
Capital gains are ₹ 20,000 under the carryover-cost rule for gifts. A gift from a relative is not taxed in the hands of the recipient, so section 73 of the Income-tax Act,…
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A acquired a capital asset at a cost of ₹ 70,000 and gifted the same to B, a relative, after one year. Market value of the asset on the date of making the gift is ₹ 85,000. B sold the asset in the next year for ₹ 90,000. Capital Gains for B
Answer and explanation
Correct answer C
Capital gains are ₹ 20,000 under the carryover-cost rule for gifts. A gift from a relative is not taxed in the hands of the recipient, so section 73 of the Income-tax Act, 2025 carries over the donor’s ₹ 70,000 cost, giving ₹ 90,000 − ₹ 70,000 = ₹ 20,000. The market value on the gift date does not replace that cost.
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West Bengal SET (WB SET)