Suresh entered into an agreement with Ramesh for sale of a building for ₹30,00,000 in June, 2021. Suresh received advance of ₹3,00,000. Subsequently the agreement was cancelled and Suresh forfeited the advance money. The

CS Executive · Tax Laws · PYQS · December 2022
Suresh entered into an agreement with Ramesh for sale of a building for ₹30,00,000 in June, 2021. Suresh received advance of ₹3,00,000. Subsequently the agreement was cancelled and Suresh forfeited the advance money. The advance money is:
(A) Taxable under the head of Income from Other Sources in the year it is forfeited
(B) Taxable under the head of Income from Capital Gain in the year it is forfeited
(C) Deduction from cost of acquisition of such asset after doing indexation
(D) Deduction from Cost of acquisition of such asset before doing indexation

Answer & Explanation:

Correct Answer: Option (A)

Official answer key: (A).

Topics: Income Tax Act, 1961

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic