Section 81 — Advance money received
Old Act equivalent: Section 51 of IT Act 1961 Sub-part: E.—Capital gains
Statutory Text
Where any capital asset was, on any previous occasion, the subject of negotiations for its transfer, any advance or other money received and retained by the assessee in respect of such negotiations— (a) shall be deducted from the cost for which the asset was acquired or the written down value or the fair market value, as the case may be, in (b) shall not be deducted from the said cost, where such advance or other money has been included in the total income of the assessee for any tax year as per the provisions of section 92(2)(h) of this Act or section 56(2)(ix) of the Income-tax Act, 1961 (43 of 1961). Profit on sale of property used for residence.
Sub-sections
None extracted from PDF.
Provisos
None.
Explanations
None.
Tables
Table 1:
computing the cost of acquisition;
Key Structure
- Applies to: Any assessee who received and retained advance or other money on a previous occasion in respect of negotiations for transfer of a capital asset.
- Asset type: Any capital asset that was previously the subject of negotiations for its transfer.
- Conditions: Where advance or other money was received and retained by the assessee in respect of earlier negotiations for transfer of a capital asset, such amount shall be deducted from the cost of acquisition, written down value, or fair market value (as applicable) when computing the cost of acquisition on a subsequent transfer.
- Time limits: None specified in this section.
- Monetary limits: None specified in this section.
- Exceptions: The deduction from cost shall not apply where such advance or other money has already been included in the total income of the assessee for any tax year under section 92(2)(h) of this Act or section 56(2)(ix) of the Income-tax Act, 1961.
Cross-References
- s092 — section 92(2)(h) provides for taxing forfeited advance money as income from other sources; where so taxed, no deduction from cost is made under this section (not yet ingested).
- Section 56(2)(ix) of the Income-tax Act, 1961 — old Act equivalent for taxing forfeited advance money (historical reference).
Amendment Notes
None noted from the extracted pages.