On 15th November, 2013, Mohan sold 1 kg. of gold, the sale consideration of which was ₹6,00,000. He had acquired the gold on 11th December, 1978 for ₹64,000. Fair market value of 1 kg. gold on 1st April, 1981 was ₹62,000

CS Executive · Tax Laws and Practice · PYQS · December 2014
On 15th November, 2013, Mohan sold 1 kg. of gold, the sale consideration of which was ₹6,00,000. He had acquired the gold on 11th December, 1978 for ₹64,000. Fair market value of 1 kg. gold on 1st April, 1981 was ₹62,000. The amount of capital gains chargeable to tax for the assessment year 2014-15 shall be —
(A) ₹17,820
(B) ₹6,00,000
(C) (₹960) loss
(D) (₹17,820) loss.

Answer & Explanation:

Correct Answer: Option (C)

Correct answer: (C) (₹960) loss. Use acquisition cost 64,000, which exceeds the 1981 fair value. Indexed cost = 64,000×939/100 = 6,00,960; capital loss = 960. This answer applies to the historical law and assessment-year context of this December 2014 paper; later amendments may differ.

Topics: Income Tax Act, 1961

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