Income Tax Department Clarifies Cost of Acquisition for Pre-2001 Properties Under New Capital Gains Tax Regime

The Income Tax Department has issued a clarification regarding the cost of acquisition for properties acquired before April 1, 2001, under the new capital gains tax regime. Taxpayers can now choose between the actual purchase price of the property or the fair market value (FMV) as of April 1, 2001, for calculating the capital gains tax. This aims to simplify tax calculations for older properties and provide clarity for taxpayers. The department's move is seen as an effort to streamline tax processes and reduce disputes over property valuations. This clarification addresses ambiguities and ensures a more straightforward approach for computing long-term capital gains for properties held for an extended period.