Meaning of "adjusted", "cost of improvement" and "cost of acquisition" (New) Section 90 / (Old) Section 55

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....• any other right (b) In case of any other capital asset  (i) if the capital asset became the property of the previous owner or the assessee before the 1st April, 2001: • Only capital expenditure after 1 April 2001 on additions/alterations is considered. (ii) in any other case (Post-acquisition assets) • Includes all capital expenditure after acquisition • Includes improvements by previous owner (if covered under Section 73 Table Sl. No. 1 modes like inheritance, gift, etc.) (iii) "No double deduction rule" for improvement cost Cost of improvement does NOT include expenditure that is already deductible under: • House Property income • Business income ....

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....owing  • (a) Original shares cost remains actual purchase price • Original asset cost = actual amount paid for acquiring the original financial asset • (b) Rights entitlement (if renounced) • If right is renounced:   • Cost = Nil for seller • (c) Subscribed rights shares • Cost = actual amount paid for subscription • (d) Bonus shares • Cost = Nil • (e) Person purchasing rights from another • Cost = amount paid to seller + amount paid to company Grandfathering rule for equity investments before 1 Feb 2018 Long-term capital asset referred to in section 198, bein....

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....us owner If cost of previous owner is unknown - FMV on date of acquisition by previous owner is taken Cost of acquisition in relation to a capital asset under demutualisation or corporatisation scheme [Section 90(12) ] (a) equity share or shares allotted to a shareholder in demutualisation Cost = cost of original membership rights (b) Trading or clearing rights of the recognised stock exchange acquired by a shareholder • allotted equity share or shares under such scheme of demutualisation or corporatisation • cost is deemed NIL Under Section 55 of the Income Tax Act, 1961 [ Upto 31.03.2026 ] Meaning of Important Term Section 55(1)(b) - Meaning of "Cost of Improvement" (1) in rel....

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...."Income from other sources". Section 55(2) - Meaning of "Cost of Acquisition" (a) Cost of Acquisition (Intangible Assets and Special Rights) In relation to a capital asset: • goodwill of a business or profession, or • a trade mark or brand name associated with a business or profession, or • any other intangible asset or a right to manufacture, produce or process any article or thing, or • right to carry on any business or profession, or • tenancy rights, or • stage carriage permits, or • loom hours, or • any other right Cost of acquisition will be in the following case • Purchased from previous....

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.... Equity (Pre 1 Feb 2018) Applicable assets • Listed equity shares • Equity mutual funds • Business trusts (covered under Section 112A) Cost computation Cost = higher of: • actual cost, OR • lower of: • Fair Market Value (FMV as on 31 Jan 2018) • Sale price Determination of Fair Market Value as on 31.01.2018 (i) capital asset quoted on recognised stock exchange (as on 31 Jan 2018) FMV = Highest quoted price on 31 January 2018 (ii) Listed Securities - If no trading occurred on that date FMV = Highest price on the nearest earlier trading day (Iii) Units not listed on stock exchange FMV = Net Asset....