The Hindu Business Line : Guideline value for computing capital gains

Losses arising on the transfer of short-term capital asset may be set off against long-term capital gains and vice-versa. The loss, if any, which cannot be so set off shall be carried forward and set off against income under `capital gains'.

A NEW Section 50C is proposed to be introduced so as to provide that the full value of consideration in respect of immovable property shall be the guideline value adopted for stamp duty purposes.

If, however, the assessee were to claim that a value lesser than the guideline value be taken to be full value of consideration, the assessing officer may refer the valuation of the immovable property to a valuation officer.

However, if the value determined by the valuation officer is higher than the guideline value, the latter shall be adopted as the full value of consideration.

This reference to the valuation officer can be made only where the assessee in any appeal, revision or reference has not disputed guideline value.

Exemptions from capital gains: An exemption is available under Section 54EC in respect of investments made in Nabard, National Highway Authority of India or the Rural Electrification Corporation.

It is proposed to add to this list of eligible investments, bonds issued by the National Housing Bank or the SIDBI.

The exemption is to the extent of investment made in bonds issued by such institutions provided the gain arises from the transfer of a long-term capital asset.

The investment must be made within six months from the date of transfer of the asset.

Set off and carry forward: At present, losses arising on the transfer of short-term capital asset may be set off against long-term capital gains and vice-versa. The loss, if any, which cannot be so set off shall be carried forward and set off against income under `capital gains' whether arising from the transfer of long-term or a short-term capital asset.

This carry-forward and set-off can be done within eight assessment years immediately succeeding the assessment year in which the loss was computed.

Sections 70 and 74 are to be amended in such a manner that:

The loss arising from the transfer of a short-term capital asset may be set off against income arising from the transfer of either a short-term or a long-term capital asset and the balance, if any, be carried forward.This can be set off against the income arising from the transfer of either a long-term or short-term capital asset within eight assessment years immediately succeeding the year in which the loss was first computed.

The loss arising from the transfer of long-term capital asset may be set off only against income arising from the transfer of the long-term capital asset and the balance, if any, be carried forward and set off against income arising from the transfer of a long-term capital asset within eight assessment years immediately succeeding the year in which the loss was first computed.

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