Yes friends, how are you all? Good morning, good afternoon,
good evening.
Whoever is watching me right now, I would like to welcome
you all.
Everything is going well.
Are you able to understand the topic?
Do you know what we are discussing?
We are discussing the topic of Capital Gains.
Sir, we are discussing about Capital Gain Head.
And in the last lecture, I told you how you will calculate
your Capital Gain.
Minus the expenses from sales, like brokerage expenses,
commission.
From that, I will minus the cost of my purchasing.
If I have done any repair, if there is any improvement of
that asset, then I will also minus that value.
Is the point clear?
This is for when?
If it is a short term capital asset.
But if it is a long term capital asset, then I will have to
minus the sales.
That will be indexed.
Indexed cost of acquisition.
Indexed cost of improvement, will have to be minused.
Sir, why this index?
Why did this index come?
Sir, remember in the last lecture, I told you that if you
have bought a property 20 years ago, 50 years ago, then
obviously, you must have bought it at a very low price.
Because of the price, you have to see the value of that
property today.
If you had gone to buy that property today, then how much
would you have earned?
In a way, you are minusing a higher value.
From what?
From your sales consideration.
So, the government is giving you a benefit.
So that your profit, your capital gains, are less.
We had discussed this.
In the last lecture.
Now, what I have to start, we have to discuss about
indexation.
What is this indexation and how is it done?
In short term capital assets, no indexation is done.
If it is done, then in what?
In indexed cost of acquisition.
Indexed means it is done in the long term.
In short term, nothing is done.
It is done in the long term.
How is it done? What happens?
Come, let's discuss this.
Have a look.
Nothing is done.
First of all, the actual amount you have bought.
First of all, take that value.
Like in the example of Rajesh Khanna, he had a bungalow
worth Rs.
31 lakhs.
So, it is a simple thing.
Take the actual cost of acquisition of Rs. 31 lakhs.
Actual cost.
Actual cost of acquisition.
How much did you buy it for?
Rs. 31 lakhs.
Actual cost of acquisition.
How much did you buy it for?
How do you multiply it?
With cost-inflation index.
Cost-inflation index.
Sir, what is this cost-inflation index?
Think yourself.
Cost and inflation.
Inflation means inflation.
Its index, parameter, standard.
The rate at which the cost increases.
Its parameter.
Suppose, the thing which was worth Rs.
100 earlier, if it becomes Rs.
300 in today's rate, then how much will Rs.
31 lakhs have to be multiplied?
Cost will become 3 times.
It was worth Rs.
100, now it becomes Rs.
It has become 5 times more expensive.
The thing worth Rs.
100, if it becomes Rs.
500, then it becomes 5 times more expensive.
So, how much will I multiply Rs.
31 lakhs with?
With 5.
So, what will come out?
Indexed cost of acquisition.
So, where does this value come from?
Government gives us this value.
We don't calculate it on our own.
Government gives us this value.
How to do it?
What to do?
This becomes CII.
Cost-inflation index.
CII of transfer year.
The year in which I am transferring.
Do you remember the definition of transfer?
Have you forgotten?
Do you remember?
The definition of transfer.
CII of the year of transfer.
Any problem?
What will be the second one?
CII of year in which held by SSE.
When SSE purchased it, what was the cost that year?
And now when it is selling, what is the cost?
Assume that when I purchased it, the cost was Rs.
According to Rs. 100.
For example, what was the cost at that time?
The index was Rs. 100.
Now it has become Rs. 500.
For example, when I purchased it, at that time, when I
purchased it,
I purchased it in 2001.
Now when I am selling it, it has become Rs.
Now it has become Rs. 500.
What will I do?
How much will I multiply Rs.
31 lakh?
Rs. 500.
How much will I divide?
Rs. 100.
The value that will come out, that is my cost, which the
government thinks that if I go to buy that house,
I would have bought it for Rs. 1 crore.
The answer will be Rs. 1 crore 55 lakhs.
If I had gone to buy it, then I would have got
Rs. 1 crore 55 lakhs.
So whatever amount I have sold,
I will not subtract Rs. 31 lakhs from it.
What will I subtract from it?
Rs. 1 crore 55 lakhs.
The remaining will be my capital gain.
In which asset is the indexation?
Long term.
In short term, there is no indication of indexation.
This is the difference.
This is the difference between short term and long term.
That is why I told you that short term and long term should
be taken separately.
Let's try to understand again.
What if someone doesn't understand?
Don't do anything.
It is a simple concept.
Take it first.
How much did you buy it for?
Actual purchase.
How much did you buy it for?
How much do you have to multiply?
From that year's index, when you are selling it, how much
do you have to divide?
When you had it for the first time.
CII for the first year.
CII of the first year.
Or if this value is not there, then CII that year's value.
See that year's value.
That value, you can take it as your value.
Whichever is later, take it.
Did you understand?
For example,
let's take the example of Mr Rajesh Khanna.
The actual purchase cost was Rs. 31 lakhs, I am
transferring it to Rs. 2022, for example, if we take the
rate of indexation, it will be Rs. 350 lakhs.
I have no idea how much it is, I am taking it as it is.
Now, I am saying that either you buy CII, the index number
of inflation, or the year you bought the asset for the
first time, which year was it? It was 1973, when I bought
it.
Or, if I take the year 2001, the latter of the two, which
is coming after 2001? It is 2001, so I will take 2001,
which is Rs. 100.
Now, this answer will be my indexed cost of acquisition,
which I will have to minus.
The actual cost of Rs. 31 lakhs, I have to multiply it by
the index number of the year I am selling.
How much do I have to divide? Either take the index number
of the year I bought it for the first time, or take the
index number of the year 2001.
Either take the index number of the year I bought it for
the first time, or take the index number of 2001, which is
the latter of the two.
For example, if instead of 1973, they had bought it in
2007, what would I have done? I would have multiplied Rs.
31 lakhs by the index number of the year I am selling.
How much do I have to divide? Either take the index number
of the year I bought it for the first time, or take the
index number of the year 2001, which is the latter of the
two.
And then the value that comes out is my indexed cost of
acquisition. I have to minus this value of the indexed cost
of acquisition from my sales consideration.
And the same rule applies for the cost of improvement.
In that also, the improvement that you made, multiplied by
the index number of the year you are selling, and the year
you made the improvement, what is the value of that year?
Number is of indexation.
Simple game.
Any problem?
What will come out of it?
You will get to know by clear cut.
You will have sales consideration.
You will minus small expenses from sales.
You will get net figure.
You will minus indexed and indexed expenses.
This figure will be your long term capital gains.
Long term capital gains.
We are talking about long term assets.
Indexation is always on long term.
Long term capital gain will be there.
This is the point.
Come with me.
What are we discussing?
Open your notes.
Government has mentioned cost inflation indices for the
financial year.
2001 is 100.
2003 is 105.
100 is 105.
If for example you buy an asset in 2001 or for example you
bought it 2-3 years before.
It has become your long term asset.
You sell it in 2002.
What will you do?
CII of the year of transfer.
Will you take your actual cost?
Simple.
Actual cost.
Whatever it is.
Multiply it.
CII of 2002 is 105.
Multiply it by 105.
When did you buy the house?
You bought it in 1999.
So CII of 1999 or CII of 2001 whichever is later.
1999 or 2001, which is later? 2001.
What is the rate of 2001? 100.
What will you get?
Indexed cost of acquisition.
You will have to minus this from sales.
You will have to minus the purchase cost.
In case of which asset?
In case of long term capital asset.
What is long term?
If it is land and building or unlisted share, then above 2
years.
If it is listed share, then above 1 year.
If it is zero coupon bond, then above 1 year.
If it is equity oriented fund unit, then above 1 year.
If it is any other asset, then above 36 months.
It becomes long term.
All these things are big.
Come here.
By 2017-18, the rate has reached 272.
Basically, the purpose of indexation is that the house you
are buying,
the house you have sold, you have to minus the purchase
cost.
If you would have purchased it today, then in how much?
You have to take that.
By 2022-23, it has reached 331.
The government is saying that the thing which was Rs.100 in
2001, today it is Rs.331.
Is it?
Is this what it means?
We have just covered the topic of
Cost Inflation Index.
Let us move to the topic of
Cost of Acquisition.
What happens in Cost of Acquisition?
What do we buy?
What do we not buy?
Let us discuss about
Cost of Acquisition.
What do we buy?
What do we not buy?
What do you understand from
Cost of Acquisition?
In how much did you acquire that thing?
In how much did you purchase it?
For example, you bought a property today.
You sell it after 3 years.
You know about the sales.
You know about the acquisition.
You know about the purchase price.
It is simple.
But where do issues come from?
They come from when you get a property as a gift.
You get a property as a will.
Or you get a property as a distribution of HUF.
You get a property from there.
And you sell it later on.
For example, Bobby Deol got a property worth 300 crores.
If a person sells it later on, in that case, he has a fixed
sale consideration.
He knows how much he is selling.
But what is the acquisition cost?
Because he did not acquire that property himself.
Some previous owner acquired that property.
His father-in-law purchased that property and gave it to
him as his property.
Now, what value did the father-in-law buy?
Or should he buy some other value?
What value should he buy?
We have to discuss this now.
Come with me.
Keep reading on the topic of cost of acquisition.
First of all, what is cost of acquisition?
Cost of acquisition is how much ever you buy that thing.
Some small expenses will be there.
You can add them.
Your purchase price will come.
All your expenses related to purchase can be added to that.
Come with me.
He is saying goodwill of the business or profession or
trademark.
He is talking about goodwill.
In goodwill, you will take time.
I will explain it to you.
There are two types of goodwill.
Do you understand what goodwill means?
What does goodwill mean?
What do you understand from goodwill?
Tell me.
Goodwill.
What is my goodwill in the market?
What do you understand from goodwill?
In my market, what do you understand?
Live crowd is watching you.
What do you understand from goodwill?
You can say this is your goodwill.
Director sir is saying this is my goodwill.
Director sir has a good goodwill in the market.
He has completed M.Com and MBA.
Applause for him.
Goodwill.
There are two types of goodwill.
You must have heard the name of Agarwal Sweets.
You must have heard the name of Bikaner Wale.
That person has goodwill.
If you see a shop of Bikaner Wale on a road, then you know
that you will get good food here.
That person has goodwill.
Bharat Petroleum.
Indian Oil Petrol Pump.
You will see it somewhere.
You know that this person has a brand image.
If you are going on a road and you feel hungry and you have
a budget of 200 rupees and you feel hungry and you have a
budget of 200 rupees
On one side is Bikaner Wale and on the other side is
Chunnulal Halwai.
Would you like to go to Chunnulal Halwai?
They are selling at the same rate.
Or would you like to go to Bikaner Wale?
Chunnulal Halwai or Bikaner Wale?
Sir, obviously I will go to Bikaner Wale.
It is the same rate.
Why did you decide to go to Bikaner Wale?
This is his goodwill.
He has a brand in the market.
He has an image.
He has a brand in the market.
He has achieved this after years of hard work, dedication
and hard work.
Today if I put Amitabh Bachchan somewhere for an ad, he has
a reputation.
He has a reputation.
Yes, Amitabh Bachchan is a sober person.
He is an educated person.
If I put him in a national thing, in the country, any
national program of the country, any government ad, if I
put him in that, then it will be a positive image.
But what if I put Radhveer Singh?
What if I put Radhveer Singh?
For example, if I want to put an ad that don't drive a car
after drinking alcohol.
Don't drive a car after drinking alcohol.
This may lead to people sleeping on the road getting hit by
the car.
In this ad,
I have a budget of 5 crores.
I am the government of India.
I have a budget of 5 crores.
Either I can put Amitabh Bachchan, who has a neat and clean
image.
Or I can put Salman Khan.
If there is an ad that don't drive a car after drinking
alcohol.
Should I put Salman Khan?
I don't want to say anything further.
You are the wise one.
Or should I put Amitabh Bachchan?
Why am I putting Amitabh Bachchan?
Because of his goodwill.
The goodwill that he has worked for 40-50-60 years, can it
be valued?
Can it be valued?
If I start teaching today, if I teach for many years, will
I also have a goodwill in the market?
That Shreyas sir teaches well.
Can you put a value on this goodwill?
You have a goodwill of 1 crore.
He has a goodwill of 10 crores.
Can you put that value?
In that case, the value of goodwill cannot be used. This is
self-generated goodwill.
It is self-generated. This value cannot be used. So, its
cost of acquisition will be nil.
Tomorrow, there is a bikaner. He has made goodwill with his
own hard work.
Tomorrow, he sells his goodwill. Consider your business
tomorrow. He sells it.
He will say, do one thing. Take the name of the bikaner. I
will sell it for 100 crores.
Will you sell it for 100 crores? First of all, is it a
capital asset? Answer is yes.
Does it fall under exclusions? No. So, it is a capital
asset. It will become a capital asset.
It will fall under definition. If I am selling, is there a
transfer? Yes.
So, will there be a capital gain on me, on the bikaner? Yes.
If there is a capital gain, what will be the sale
consideration? 100 crores.
What will I do with the minus acquisition cost? This is the
question.
I have not purchased it. The bikaner has not purchased the
goodwill.
He has made it with his own hard work. In that case, you
say, nil.
Minus, you don't have to do anything. 100 crores will be
his capital gains.
The loss of working with hard work is that when you sell
your goodwill in the market,
I am not saying minus, I am saying minus. He is saying, you
will sell minus.
You don't have to sell minus, you have to sell minus.
When you sell goodwill, in that case, its acquisition cost
will be nil.
In the case of self-generated,
and whatever will be the sale consideration, it will become
your capital gain.
But suppose, the person who purchased the goodwill from the
bikaner, what will happen to him? It is a purchased
goodwill.
Suppose, he purchased goodwill worth 100 crores from the
bikaner, and he got another party.
He says, we have heard that you have purchased goodwill
from the bikaner.
And we also want to enter the restaurant business. So, you
sell this goodwill to us for 125 crores.
You purchased it for 100 crores, we will give you 25 crores
extra.
Sell this goodwill to us for 125 crores.
What will happen in that case?
You sold it for 125 crores and purchased it for minus 100
crores.
25 will become its capital gain. Simple.
What will be the acquisition cost in this case?
You purchased it for 100 crores. In this case, it will
become the value of goodwill worth 100 crores.
Is the point clear? Is there any problem in this?
You make goodwill on your own. So, the value cannot be told.
You have invested 40, 50, 100 years in the business.
Because of that, goodwill has been made.
So, what is its value? Its value cannot be calculated. That
is why it is 0.
But, if you buy it, then the value of goodwill will be
accepted.
This was the first point. Now, let's cover the second point.
I will make you collect this reading. Don't worry about it.
Just focus on understanding it. Once you understand it, you
will be able to read it easily.
Second point. You get a capital asset as a gift.
You get a capital asset from someone's property.
HUF is divided and you get that capital asset.
You are the evil person who took the capital asset of HUF.
Now, you go to the market to sell that capital asset.
Do you know how much you will sell?
What will be the issue? Cost of acquisition.
Because you have not given any money. You have divided it.
What should be the cost of acquisition for you?
So, in this case, the government says,
Section says, Income Tax Act says,
When there is a transaction like this, then the cost of
acquisition in the hands of the previous owner, will be
considered as the cost of acquisition for you.
For example, if Bobby Deol's father-in-law gives him a
property worth 300 crores, and Bobby Deol goes to the
market and sells that property worth 300 crores, then what
will that sales consideration show?
That sales consideration will show 300 crores.
If there are any small expenses, it will be minused.
Net, let's say, it will be 299 crores.
Now, what will be the issue?
What will be the indexed cost of acquisition or cost of
acquisition?
What will be the indexed cost of acquisition or cost of
acquisition?
The rate at which the father-in-law must have acquired, the
rate at which the father-in-law must have acquired, take
that rate as the cost of acquisition.
Because it is long term, that is why CII, the year when he
is selling this, do that.
And CII here, either when his father-in-law acquired it for
the first time or in 2001, whichever is later, do that.
That will give you the indexed cost.
Take the original cost of acquisition of the father-in-law
in this case.
What I mean to say is, whatever amount the previous owner
had acquired, that will become your cost of acquisition.
You get a gift, so the one who gave the gift, the rate at
which he bought, that will become your cost of acquisition.
What will you do on that?
Do the indexation.
You get property, so the original cost of the one who gave
the property,
has been divided by HUF.
So when HUF bought it originally, the value at which HUF
bought it, that will become your original cost.
What will you do on that?
You will do the indexation on that.
Any problem in this?
Okay sir, let's go to the next.
You get shares from the company.
For example, there are big companies.
I have told you in a lecture before, they give you an
employee stock option plan.
The company says, you will have a package of 10 lakhs.
And for 3 years, if you continuously work in our
organization, we will give you shares.
You will get 1000 shares of the company.
At that time, whatever the value is, you sell it in the
market.
In a way, we will give it to you for free or at the rate of
10 rupees.
Suppose the employee works in the market for 3 years.
He worked for 3 years.
In the 3rd year, he gets 1000 shares of the company.
He goes to the market and sells his shares.
Now if he sells, then there is a sale consideration.
He is selling shares.
It is a capital asset.
Why would he need capital?
He knows how much he is selling in the market.
But what is the acquisition cost?
What is the acquisition cost?
He himself did not give anything.
Because he was in the service.
Because of the service, because of the job, he gets those
shares.
In that case, the government said, it is a simple thing.
The day you exercise this option, let's say,
you want shares.
And you want to sell the shares in the market.
The day you exercise this option, the share's fair market
value, you consider it as your cost and minus it.
It is a simple point.
Is there any problem in this?
Fair market value, the day you exercise your option.
Have you bought any depreciable asset from anyone?
For example, there is plant and machinery.
Generally, people buy original plant and machinery.
But sometimes, you have to buy a second-hand machine.
Because the company doesn't have a budget to buy a new
machine.
A new machine will cost 1 crore.
An old one may cost 30 lakhs.
Second-hand plant and machinery.
In that case, what will be the acquisition cost?
Rated Non-Value.
How much is it worth?
How much is its WDV worth?
Rated Non-Value.
Is there any problem in this?
Is there any problem?
No.
I have bought an asset before 2001.
Because, sir, you are talking here.
Why are you asking about 2001?
Why are you paying attention to 2001?
Sir, I am paying attention because,
remember what I told you about CII.
I told you about CII.
What did we do in the numerator?
CII of the year of transfer.
And what did we do in the denominator?
This year, the SSE has it.
That year's CII.
Or, the CII of 2001.
Whichever is later.
So, suppose, if I have bought an asset before 2001, then
what should I value it?
What should be its acquisition cost?
Suppose, I have bought a plot in 1990,
and today I sell it.
What should I value it?
It's a very genuine case. It will be found in every house.
In 1990, someone bought a plot. Today, I sell it.
What value should I take? What value should I not take?
In that case, what did the government say? What do you have
to do?
You take the fair market value of either 2001,
I'll write it here,
FMV, fair market value, 14, 2001 or actual, whichever you
bought, whichever is higher.
The government is giving you a benefit in this.
Whichever is higher among the two.
Suppose, in 1990, when you bought that plot,
in 1990, when you bought that plot, its value was 5 lakh
rupees.
Okay, sir? 5 lakh rupees.
I'm telling you the value of 1990.
And in 2001, its value was 25 lakh rupees.
So, who has more benefit?
In a way, I minus the cost of acquisition from my sale
consideration, right?
I minus it from my sale consideration, right?
So, who has more benefit?
In reducing more value or reducing less value?
In reducing more value.
So, in that case, what is more value? 25 lakh.
So, I minus 25 lakh.
Whichever is higher.
Which case is this?
This is the case if you have bought an asset before 2001.
This is the case of that time, my dear.
What are we discussing?
Will someone tell us what we are studying?
Sir, I don't understand anything.
What are we studying?
Brother, we are studying about the cost of acquisition.
What is the cost of acquisition?
Why do we take the cost of acquisition?
What is its purpose?
Its purpose is that when you take out your capital gain,
sales, you know how much you are selling your property.
Where will our problem get stuck?
The problem will get stuck in how much we have purchased.
If you have purchased it yourself, then there is no tension.
But suppose you get it from somewhere else.
You get someone's accumulated property.
Now, what will you minus the purchase?
In that case, you will have to ask that person.
Brother, how much did you buy?
Whatever you buy, I will put the value here.
I will multiply that by CII.
I will do indexation.
I will minus the value.
This is what we are studying.
We are studying about the cost of acquisition, my dear.
Are some points clear?
Is it clear?
Shall we go ahead and do some reading?
If we get one or two points, we will cover it in the middle.
Come.
What is the first point?
It talks about the goodwill of the business.
Goodwill of the business or profession.
Right to carry on.
What if you have bought it from the previous owner?
The previous owner, when you take the purchase price.
Brother, you have bought the goodwill.
The purchase is goodwill.
I bought it from Beacon Air in 125 crores.
That is the thing.
I am buying the goodwill.
When I sell the goodwill later,
I will minus the value that I have bought.
But if I have generated it myself,
I have made the goodwill myself, how will I know the value
of it?
How much effort I have put, how much cost I have put.
In that case, the value is zero.
Come.
For example, in case of circumstances, mentioned under 49.1,
if you get it from a gift, from a succession, from an
inheritance,
if you get money from a partition of HUF, then in that
case, what will happen?
In that case, what will be our value?
The cost of the previous owner.
It was mentioned above.
The cost of the previous owner.
Whatever money the previous owner has bought, that will
become my cost of acquisition.
Yes, I will be able to do indexation in that.
Keep this in mind.
Shall we go next?
Self-generated, third point.
What is this called?
If it is a self-generated asset, in case of self-generated
asset, like goodwill of the business, or if I have a brand
name, then in that case, if it is self-generated, then what
will be my cost of acquisition?
It will be zero.
Any problem?
There are bonus shares.
If you are allotted bonus shares after 1-4-2001,
sometimes bonus companies give bonus shares.
You must have seen.
In the case of bonus shares, if you are allotted after
1-4-2001, then its value will be nil.
And if you are allotted before 1-4-2001,
what will be the cost of acquisition?
The market value of 1-4-2001 will be yours.
Okay?
Any problem with this?
And try to understand one more case.
When we are talking about bonus shares, if you are allotted
bonus shares before 1-Feb-2018, on which you have already
paid the STD, then in that case, in case of transfer of
bonus shares, in case of transfer of bonus shares, are you
reading this?
In case of transfer of bonus shares, which were allotted to
you before 1-Feb-2018, were allotted to you before
1-Feb-2018, and today you sell it in the market.
If you sell it, then do you know the sales consideration?
There is a discussion on buying value.
In case of transfer of bonus shares, allotted before
1-2-2018, on which you have already paid the STD, what will
be its cost during transfer?
Higher of actual cost of the acquisition?
Or lower of FMV and actual sales?
This is a simple point.
Simple point.
Any problem?
Compare both.
What is the actual cost of acquisition?
If it is after 1-4-2001, then it is zero.
If it is before that, then take the market value of
1-4-2001, and compare it with the market value of
31-Jan-2018.
Compare it with that.
Compare it with the actual value you will sell.
Whatever will be less in both, your value will be saved.
If you read it once, you will understand.
Any problem?
No problem?
Let's talk about this.
Is there any long-term capital asset?
Refer to in 112A.
What is this long-term capital asset?
For example, I have some equity shares, listed equity
shares.
My share is listed in stock exchange.
And I have held it for more than a year.
In general, you will get a lot.
For more than a year,
I have held a listed equity share.
I have held it for 1.5-2 years.
And today I want to sell it.
I bought that share for Rs. 2000.
I held it for 2 years.
Because if I sell it for more than a year, then my
long-term capital asset...
Long-term capital asset...
Now I go to the market and sell it.
I bought a share worth Rs. 2000.
Now it is worth Rs. 4000.
It is a very general case.
You will see it in many places.
When you do it yourself, you will have similar cases in
your personal life.
I bought a share for a long time.
In 2 years, the value doubled, tripled.
I come out of it.
In that case, do you know the sale concentration?
Do you know how much you are selling?
Now what will you have to do minus?
How will you have to do it?
We are discussing the cost of acquisition.
What will we take in that case?
In that case, what will we have to take in the cost of
acquisition?
In that case, do you know how much you actually bought?
Or do you know this value?
Or do you know its fair market value?
Rs. 31.18.
Or sale concentration?
Do you know this?
In these two, lower whichever is higher.
Compare this and higher whichever is higher.
It is a little complex, but try to understand it.
I did not bring this from my home.
When I used to read this,
I used to have difficulty.
Once you read and understand, you will understand.
Write it down and remember it.
Do you know how much you actually bought?
You have to compare it.
If I had held it in 2018, then on that day, 31st January
2018, its highest value, because in the market, whenever
you open a share market, its highest value, lowest value,
opening and closing also comes.
If you had this share on 31st January 2018, then what was
its value on that date?
Highest.
And how to compare it?
Compare it with the share you are selling today.
On 31st January 2018, did you have the share?
Yes or no? If yes, then what was its highest value on that
date?
How will you compare it?
Compare it with the value
I am selling today.
For example, if this value was low,
I will buy this.
How much did I buy from it?
The highest value from that will be my cost of acquisition.
If I minus that value from my sale price, then my capital
gains will come.
In that case, my long-term capital gain will come.
There are some technical things, I agree.
I am also trying to simplify it from my side, my dear.
But there is income tax.
Albert Einstein also said that in this world, it is easy to
understand everything except income tax.
You are seeing for yourself.
What is the objective of government generally?
To collect as much tax as possible from people.
Ideally, what should they have done?
They should have reduced the value from sales.
But what are they doing now?
They are doing the opposite here.
They are reducing the value more here.
Whichever is higher.
It becomes a little difficult to understand their intellect.
It can be assumed that to benefit the SSE, they are doing
all these things.
This can also be taken as a point.
To benefit the SSE, to get its benefit, that is why the
cost of acquisition is a little high.
We will take it by indexing.
What will be the cost of acquisition?
If you buy from the previous owner, then take its cost.
In that, do the indexation.
If you have kept the shares for long term, then you know
the sale consideration.
What is the minus in that?
Either the actual, how much ever you bought.
And suppose if you have that share, from the time of
January 2018, then the value of that date, or the actual,
how much ever you are selling, whatever is less in that,
compare it with the actual.
See this a little again.
If you don't understand, I will cover it again in the next
lecture.
Don't take tension.
You don't take tension in any way.
We have covered the actual cost of acquisition today.
It is a very important topic.
Out of the sale consideration, if there is more value, than
the minus in anything, then it is the cost of acquisition.
It will be very useful in practical life.
Whenever you sell a property, you know the value of
selling, how much I am selling, but how much I have bought.
And because it is long term, do the indexation or not?
You have to keep this value in mind.
If you hold for more than 2 years, it will become long term.
Do the indexation.
People don't know these things.
For example, if you sell a plot worth 1 crore, you bought
it for 10 lakhs, 10 years ago.
I have seen the actual case.
You sold a plot worth 1 crore, you bought it 10 years ago
for 10 lakhs.
You forgot to do the indexation.
You have minus 10 lakhs out of 1 crore.
The 90 lakhs capital, the tax on 90 lakhs, you have
deposited it.
Why are you minusing 10 lakhs?
When it is long term, do the indexation on 10 lakhs.
Who knows, 10 lakhs can become 30 lakhs, 35 lakhs, 40 lakhs.
You have minus 40 lakhs out of 1 crore.
If it was 60 lakhs, the capital gain would have been there.
Now the capital gain of 90 lakhs is there.
You have done stupidity for no reason.
That is why I am saying, these are very important things.
When you will sell your plot, when you will sell a house,
if you don't know all these things, will you come to take
tax?
The government will not stop you from taking tax.
They will say, okay, come.
But you should know, when to do the indexation, when not to
do it, what cost to take and what not to take.
These are the things.
We will meet in the next lecture.
We will revise it a little in the next lecture.
We will cover the remaining topics.
Thank you very much, friends.