Advance money forfeiture under capital gains law affects cost base, double taxation, and buyer-side capital loss treatment. Advance money received in transfer negotiations is deducted from the cost base when forfeited and not separately taxed, but no deduction is allowed where the advance has already been included in total income. Under the earlier regime, forfeited advance money was reduced from cost, fair market value, or written down value, while amounts forfeited on or after 01.04.2014 were treated as Income from Other Sources and not reduced from cost. For the buyer, forfeited purchase money is not treated as capital loss.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Advance money forfeiture under capital gains law affects cost base, double taxation, and buyer-side capital loss treatment.
Advance money received in transfer negotiations is deducted from the cost base when forfeited and not separately taxed, but no deduction is allowed where the advance has already been included in total income. Under the earlier regime, forfeited advance money was reduced from cost, fair market value, or written down value, while amounts forfeited on or after 01.04.2014 were treated as Income from Other Sources and not reduced from cost. For the buyer, forfeited purchase money is not treated as capital loss.
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