Capital
Gains
Notional
cost of acquisition of the asset
The
notional cost of acquisition of capital assets is specified in section
49 of the Income Tax Act . As per this section, in the circumstances
entioned hereunder, the cost of acquisition in the hands of the
assessee shall be taken to be the same as it was for the previous
owner of the asset.The cost of improvement of the asset incurred
or borne by the previous owner or by the assessee as the case may
be is also claimable while computing the capital gains. The circumstances
covered by section 49 are :
1.
transfer on account of any distribution of the assets on the total
or partial partition of a Hindu Undivided Family.
2.
transfer under a Will or Gift.
(a) transfer by way of succession , inheritance or devolution./,
or
(b) on any distribution of assets on the liquidation of a company,
or
(c) under a transfer to a revocable or irrevocable trust, or
(d) under the circumstances of transfer between a holding company
and subsidiary company and between an amalgamating company and
an amalgamated company which otherwise are not regarded as a transfer
for the purposes of capital gains .
4.
where the HUF becomes the owner of the property on account of the
individual member's act of throwing his separate property in the
common stock of the HUF or by transferring the property to the HUF
for inadequate consideration as specified in section 64(2) of the
Income Tax Act.
In
the above circumstances the term previous owner means the last owner
who had become the owner of the property in circumstances other
than those enumerated above.
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