Capital gains tax on future sale of immovable property disclosed under the black money disclosure scheme will be levied from date of its acquisition, while for other assets, it will be computed from June 1, the day the scheme became operational, CBDT said on Friday.
The Central Board of Direct Taxes (CBDT) issued the clarification a day after it released the fifth set of frequently asked questions (FAQs) containing answers to 12 questions on the Income Declaration Scheme (IDS).
The FAQs were issued considering the fact that investment in an immovable property may be funded partially from undisclosed and disclosed sources.
In such cases, if the property is sold in near future, gains from part of the property may be long term and the balance may be short term. This would have caused undue hardship to the declarant.
“Answer number 4 of the said FAQ shall only be applicable for determining holding period of an immovable property for which the date of acquisition is evidenced by a deed registered with any authority of the state government,” it said.
“However, for assets other than immovable property declared under the scheme, the holding period shall start from June 1, 2016, for purpose of computation of capital gains.”
Under the scheme, one can come clean by paying 45 per cent tax and penalty on undisclosed income during the 4-month window closing on September 30.
CBDT said clarification was sought if the answer number 4 of the fifth set of FAQs will apply to all assets declared under the scheme or it is limited to only immovable property.
“The clarification issued relates only to determination of holding period of immovable property,” it said.
There is an option with the declarant to declare the fair market value of immovable property by applying the cost inflation index to stamp duty value of the property.