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AAFM GLO_CWM_LVL_1 Exam - Topic 7 Question 45 Discussion

Jaya is the owner of two residential houses. She sold one house on 23-12-2011 for Rs.12,50,000 which was purchased by her on 25-4-1979 for Rs.80,000. The market value of the land as on 1-4-1981 was Rs.98,000. Expenses on transfer were 1.5% of the sale price. The entire sale proceeds was utilized to construct the first and second floor on her second house which she completed by 15-3-2010. Compute the capital gain for the assessment year 2012-13. [CII-12-13: 852,11-12: 785, 10-11:711, 83-84: 116]
B) 461950
A) 562506
C) 570360
D) NIL

AAFM GLO_CWM_LVL_1 Exam - Topic 7 Question 45 Discussion

Actual exam question for AAFM's GLO_CWM_LVL_1 exam
Question #: 45
Topic #: 7
[All GLO_CWM_LVL_1 Questions]

Jaya is the owner of two residential houses. She sold one house on 23-12-2011 for Rs.12,50,000 which was purchased by her on 25-4-1979 for Rs.80,000. The market value of the land as on 1-4-1981 was Rs.98,000. Expenses on transfer were 1.5% of the sale price. The entire sale proceeds was utilized to construct the first and second floor on her second house which she completed by 15-3-2010. Compute the capital gain for the assessment year 2012-13. [CII-12-13: 852,11-12: 785, 10-11:711, 83-84: 116]

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Suggested Answer: B

by Larae at Jun 15, 2022, 05:55 PM

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Joseph
10 months ago
Did she really use all the sale proceeds for construction?
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Alethea
10 months ago
Totally agree with Jeannetta, seems right!
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Corinne
11 months ago
Wait, how can the gain be that high?
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Jeannetta
11 months ago
I think the capital gain is around Rs.570360.
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Ligia
11 months ago
Sold for Rs.12,50,000, bought for Rs.80,000.
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Noe
11 months ago
I think the capital gain should be calculated after deducting the expenses from the sale price, but I’m not confident about the final amount.
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In
11 months ago
I’m a bit confused about whether to use the market value as of 1981 or the purchase price for calculating the indexed cost.
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Charlesetta
11 months ago
This question seems similar to the practice problems we did on capital gains. I think we need to factor in the expenses on transfer correctly.
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Gail
11 months ago
I remember we discussed how to calculate the indexed cost of acquisition, but I’m not sure if I got the CII values right for the years.
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Cassandra
11 months ago
Hmm, I'm leaning towards option B. The wording about the protected destination needing an LDP label and prefix-SID makes the most sense to me as the critical requirement.
upvoted 0 times
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Carole
12 months ago
Hmm, I'm not totally sure about this one. Tiered pricing is a bit tricky, and I want to make sure I select the right methods.
upvoted 0 times
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