Section 55 -, COST OF ACQUISITION (‘COA')
Section 55 -, COST OF ACQUISITION (‘COA')
General
Provision
·
Case (a): Capital
Asset Has Been
Purchased:
|
Date of Purchase |
Before 01.04.2001 |
On or After 01.04.2001 |
|
Cost of Acquisition |
Higher of the following two: >
Cost incurred by the assessee on the purchase of
capital asset; or >
FMV as on 01.04.2001 |
Cost incurred by the assessee on the purchase
of capital asset |
•
Case (b):
Capital Asset Has Been Self-Generated: As per the decision of the Supreme
Court in the case of B.C.Srinivasa Setty, cost of acquisition of any self-generated capital asset other than those given under Category 2 below shall be INDETERMINATE. Therefore, no 'capital gains
would arise in such cases.
Examples: Sale of spontaneously grown trees, goodwill of
profession, etc
Special Cases
•
CATEGORY 1: Shares/Securities:
Option to take FMV as on 01.04 2001 is
available in respect of these capital assets.
|
Capital Asset |
Cost of Acquisition |
Period of Holding |
|
Original Shares/ |
Purchase
price |
Starts from the
date of purchase |
|
Securities |
|
allotment of shares/securities |
|
Bonus Shares/ Securities |
➢ If allotted before 01.04.2001: FMV ➢ Otherwise – NIL |
Starts from the date of allotment
of bonus shares/securities |
|
Renouncement of Right to
Subscribe Shares/Securities |
NIL |
Short-term (Always) |
|
Right Shares/ Securities - Purchased by the person to whom right is issued – Purchased by the person to whom
right is renounced |
Price actually paid under the right issue |
Period of
holding to start
from the date of allotment of right shares/securities |
|
Price paid to the person
who renounced the right and the
amount paid to
the company under the right
issue |
Period of holding to start from the date of allotment of right shares/securities |
•
CATEGORY 2: Specified Capital Assets:
Option
to take FMV as on 01.04.2001 is not available in respect of these capital
assets even if the are a wired before 01.04.2001.
|
Capital Asset |
Cost of Acquisition |
|
|
Acquired Asset |
Self-Generated Asset |
|
|
Goodwill of Business
(Profession) |
Purchase Price |
NIL |
|
Trademark/Brand Name associated
with Business |
Purchase Price |
NIL |
|
Tenancy Rights |
Purchase Price |
NIL |
|
Stage Carriage Permit (Route
Permits) |
Purchase Price |
NIL |
|
Loom Hours |
Purchase Price |
NIL |
|
Right to Carry on any
Business/Profession |
Purchase Price |
NIL |
|
Right to Manufacture: Produce or Process any
Article or Thing |
Purchase Price |
NIL |
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#COSTOFACQUISITION
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