Taxability on forfeited amount

[Anup Kumar Grover]

An Assessee has received an advance against property, on non payment of balance consideration, the advance is forfeited, whether this forfeited amount is subject to Income Tax in the year, in which it is received/forfeited

AI Summary

Forfeited Property Advance Adjusts Purchase Cost, Affects Capital Gains Taxation Upon Asset Sale Under Capital Asset Rules. An individual inquired about the tax implications of a forfeited advance received against a property due to non-payment of the balance consideration. The response clarified that if the property is considered a capital asset, the forfeited amount should be deducted from the purchase cost of the asset. This adjustment impacts the calculation of capital gains, which will be taxed in the year the asset is actually sold.