Section 48 of ITA, 1961 : Section 48: Mode Of Computation

Explanation using Example

Let's consider a hypothetical scenario where Mr. Sharma, a resident of India, sold a piece of land in 2023 that he had purchased in 2000. The full value of the consideration he received from the sale was ₹50 lakhs. The cost of acquisition of the land in 2000 was ₹10 lakhs, and he spent ₹2 lakhs on legal fees and brokerage at the time of sale (expenditure incurred wholly and exclusively in connection with the transfer).

To compute the capital gains, Mr. Sharma would deduct the ₹2 lakhs spent on legal fees and brokerage from the ₹50 lakhs received, leaving ₹48 lakhs. However, because the ...

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