Capital Asset Acquisition Form: Fill & Download for Free

If your house is valued at Rs. 1.5 Cr, that is your opinion and your valuation. I am not saying that it is wrong; I am not saying it is correct. So if you are selling the house ar Rs. 1.25 Cr, that is a loss as per you. BUT … if the original house purchase price was indeed Rs. 1.5 Cr then you are absolutely correct - you are selling at a loss.Now let me explain how taxation works. House forms part of the capital assets. When a capital asset is sold, it incurs a gain or loss. In the case of a property sale, the loss is rare because property usually appreciates over time. You must calculate the gain of loss on the property sale as:[A] Purchase Price - Selling price = Absolute Gain or Loss.Next question is how long was the property held. Was the property sold within 3 years of acquisition or after?[B] If the property was sold within 3 years or less, it is a Short Term Gain or Loss.[C] If the property was sold after 3 years, it is a Long Term Gain or Loss.If [B], the gain or loss is added directly to your income as “other income” and you will have to pay tax as per slab. If you have really made a loss, you will be paying less tax. If you cannot completely set off the full loss (income < STCL) then you can carry forward the loss balance for the next 8 years.If [C], the indexed gain or loss will have to be calculated. Indexed gain is taxed at 20%. Indexed loss can be set off against other long-term gains (from property only) and if that is not possible in the same year, both the Long Term loss can be carried forward for 8 Assessment Years immediately following the Assessment Year in which the loss was first computed. If you have indeed made a loss, then your indexed loss will be even higher. If you cannot set off loss in the next 8 years, too bad; it is your loss.As regards to the Rs. 50 lakhs you mentioned, that is the threshold for TDS. The buyer is supposed to deduct 1% of the sale price as TDS and deposit the same. Make sure that you furnish your PAN and ensure that TDS is deposited. Ensuring PAN correctness is very very important because later on it will become very difficult to reconcile. You can TDS refund in return of there is a real loss.Best to consult a tax consultant.

RSU or Restricted Stock Units are shares of the company given to employee free of cost but with some restrictions(as the name suggests). The restriction is that though an employee is granted RSUs on a specific day (such as when he joins a company or gets a promotion) he gets ownership of the shares over a period of time.From our article RSU of MNC, perquisite, tax , Capital gains, eTradeOn Granting of RSUOn Granting of RSU no tax implication. It is just a promise by the employer.Vesting of RSUVesting date is the date on which the predefined percentage of shares get transferred to the employee according to the predefined schedule. Say one is granted 100 RSUs to be vested over 4 years in the ratio 25%/25%/25%/25% on 16 Dec 2013. Then 25% of RSUs i.e 25 stocks of the company will vest on 16 Dec 2014. On the vesting day, the given percentage of RSUs are transferred to employee’s trading account, for example, eTrade or Charles Schwab account for an American MNC. On Vesting, one has to take care of following thingsone has to pay tax based on income slab.the value of shares is considered as income in India.Companies are obligated to deduct taxes for RSUs vested. The most common method of deducting tax is share withholding, where the company withholds enough shares to cover the tax liability and deposits net shares to your brokerage account. This option is called as Sell to cover. Some companies permit other methods, such as cash or sell-to-cover transactionsThe default option is Sell to Cover hence If 70 RSUs are vested then you would get only 49 stocks in your account due to taxation. 30% of 70 = 21 which is taken as tax. So no of shares in the account becomes 70-21=49.For RSUs, the acquisition price or purchase price is zero and so the entire market value of vested shares is treated as income in India as a perquisite. The market value of the shares vested (number of shares vested x Fair Market price X Conversion from Dollar to Indian Rupee) is added to the employee’s taxable income as perquisites. The price at which Stock is given to you is called as the Fair Market Value. All the shares that are vested are used to calculate the Perquiste Income which includes the stocks which were sold for tax. if 70 RSUs are vested then you would get only 49 stocks in your account due to taxation but all the 70 shares will be used to calculate the perquiste income.Calculating Perquiste income for RSUIt is declared in his Form 12BA for the year and is available in your Form 16, as shown in the images below. The Indian company adds it to employee’s Income and charges Tax accordingly. There is no tax liability in the country of MNC. One does not even get Form 1042-S for RSUs.Selling of RSUOne can only sell the RSUs that are vested. On the sale of the vested shares, the profit earned is a capital gain and is therefore taxable in India.For RSUs, the difference between the vesting price or the Fair Market Value and the sale price is the as capital gains.The period of holding begins from the vesting date up to the date of saleAs the RSUs of the MNCs are not listed on the Indian stock exchange and no STT(Security Transaction Tax) is paid so the definition of a long term and short-term capital gains is different from the shares listed on Indian stock exchange like BSE and NSE.From FY 2016-17 i,e for the sale of unlisted shares on or after 1st April 2016 UNLISTED equity shares is given below. This capital gain must be declared in Schedule CG of ITR-2 or ITR-4 so that tax may be suitably chargedshort-term capital assets – when sold within 24 months of holding them. Short-term gains are taxed at employee’s income tax slab rateslong-term capital assets – when sold after 24 months of holding them. Long-term gains are taxed at 20% with indexationOne may have to pay Advance Tax on sale of RSUs

2 Case laws come to my mind ,on reading this question , which are -VODAFONE. v UNION OF INDIAThe most INFAMOUS case law in Indian Income Tax history ,the VODAFONE VERDICT , though actually in favour of Vodafone ,but still the INDIAN GOVT , brought a retrospective amendment in law ,with effect from 2000 to tax the tax avoidance ,undertaken by Vodafone , it was after this event ,that INDIA was crowned as a country of TAX TERRORISM.Vodafone (based in Netherlands) acquired Cayman Islands-based Company CGP Holdings Limited from Hutchinson Telecommunications International Limited. The deal was concluded at 11.1 billion dollars, as CGP Holdings controlled 52 % of Hutichison-Essar Limited (based in India) and had the option to buy 15 % more hence as a consequence of this acquisition Vodafone had effective control of 67% over Hutchison-Essar. The Indian Income Tax Authorities claimed that Vodafone was to pay capital gains tax on capital gains accrued due to the consequent control of Hutichison-Essar Limited. The amount of tax payable was estimated at 2.5 billion dollars.Supreme CourtVodafone in its turn filed a Special Leave Petition before the Supreme Court. The Apex Court held that the Bombay High Court had erred in its decision and should have employed a “look at” approach instead of a “look through” approach. They emphasized on the theory of Corporate personality wherein the identity of the shareholder is distinct from that of the company. The acquisition of CGP Holdings was not solely to gain control over Hutchison-Essar, but the gain in control was a corollary of the acquisition, which was not the purpose of the acquisition.Capital GainsAccording to Section 9 (1)(i) of the Act, which forms the heart of the controversy, income accruing indirectly or directly out of transfer of Capital Assets situated in India is deemed to accrue in India out of the hand of a Non-Resident. The Supreme Court expressed its view in this regard stating that the transfer of shares of CGP did not result in a transfer of Capital Assets.ConclusionThus, smart investment structures such as the one created by Vodafone help in avoiding large tax amounts in jurisdictions such as India where the taxation rates are high and taxation laws are extremely stringent despite measures like Double Taxation Avoidance and Advance Pricing.CIT. VS SHANTI BHUSHANA top S.C lawyer demands heart surgery expenses as business expense.Professional’s heart surgery expense not deductible u/s 31 or 37(1)The assessee, a lawyer, claimed that his professional work had led to a heart attack and that the expenditure incurred by him on a heart operation was deductible u/s 31 on the ground that the heart was “plant” and the expenditure was incurred on “current repairs”. It was also claimed that as his professional receipts increased substantially after the operation, the expenditure was “wholly & exclusively” for profession and deductible u/s 37(1). The AO, CIT(A) & Tribunal rejected the assessee’s claim. On appeal to the High Court, HELD dismissing the appeal:(i) The claim for deduction u/s 31 is not acceptable because (a) if the heart were to be considered a “plant”, it would necessarily mean that it is an asset which should have found a mention in the assessee’s balance sheet. This was not done and cannot be done as the “cost of acquisition” of such an asset cannot be determined and (b) Even if the widest meaning to the word “plant” is given the heart does not satisfy the “functionality” testbecause while the heart is necessary for survival, it does not mean it is used as a “tool” of trade or professional activity;(ii) The claim u/s 37(1) is also not acceptable because the expenditure is not incurred wholly and exclusively for the purposes of the assessee’s profession. There is no direct or immediate nexus between the expenses incurred by the assessee on the coronary surgery and his efficiency in the professional field per se.Thank You