Section 73 — Cost with reference to certain modes of acquisition

(1) In the case of a capital asset specified in column B of the Table below,
the cost of acquisition of the asset shall be deemed to be the cost as mentioned
in column C of the said Table.
TABLE
Sl. No. Description of the capital asset Cost of acquisition
A B C
1. If the capital asset became the property
of the assessee—
( a) under a gift or will; or
( b) by succession, inheritance or
devolution; or
( c) on any distribution of assets on
the liquidation of a company; or
( d) under a transfer to a revocable or
an irrevocable trust; or
( e) being a Hindu undivided family,
by the mode referred to in section
99(3) after the 31st December,
1969; or
( f) under any such transfer as is re-
ferred to in section 70(1)(a), (c),
(d), (e), (g), (h), (i), (j), (l), (m), (n),
(o), (t), (u), (v), (w), (zd), (ze) or (zf).
The cost for which the previous
owner of the property acquired
it, as increased by the cost of
any improvement incurred or
borne by the previous owner
or the assessee.
2. Capital asset, being a share or shares
in an amalgamated company which is
an Indian company that became the
property of the assessee in considera-
tion of a transfer referred to in sec-
tion 70(1)(f).
The cost of acquisition to him
of the share or the shares in the
amalgamating company.
3. Capital asset being a share or debenture
of a company, which became the
property of the assessee in consideration
of a transfer referred to in section 70(1)
(z) or (za).
That part of the cost of
debenture, debenture-stock,
bond or deposit certificate in
relation to which such asset is
acquired by the assessee.
4. Capital asset, being specified security
or sweat equity shares, referred to in
section 17(1)(d).
Fair market value taken into
account for the purposes of the
said clause.
5. Capital asset, being rights of a partner
referred to in section 42 of the Limited
Liability Partnership Act, 2008 (6 of
2009), which became the property of
the assessee on conversion as referred
to in section 70(1)(ze).
The cost of acquisition to him
of the share or shares in the
company immediately before
its conversion.
Sl. No. Description of the capital asset Cost of acquisition
A B C
6. Capital asset, being share or shares of
a company acquired by a non-resident
assessee on redemption of Global
Depository Receipts referred to in
section 209(1) (Table: Sl. No. 2) held
by such assessee.
The price of the said share
or shares prevailing on any
recognised stock exchange on
the date on which a request for
redemption was made.
7. Capital asset, being a unit of a business
trust, which became the property of the
assessee in consideration of a transfer
as referred to in section 70(1)(zi).
The cost of acquisition to him
of the share referred to in the
said clause.
8. Capital asset, being a unit or units in
a consolidated scheme of a mutual
fund, which became the property of the
assessee in consideration of a transfer
referred to in section 70(1)(zj).
The cost of acquisition to
him of the unit or units in the
consolidating scheme of the
mutual fund.
9. Capital asset, being equity share of a
company, which became the property
of the assessee in consideration
of a transfer referred to in section
70(1)(zb).
That part of the cost of the
preference shares in relation
to which such asset is acquired.
10. Capital asset, being a unit or units in
a consolidated plan of a mutual fund
scheme, which became the property
of the assessee in consideration
of a transfer referred to in section
70(1)(zk).
The cost of acquisition to
him of the unit or units in
the consolidating plan of the
scheme of the mutual fund.
11. Capital asset being a unit or units in
the segregated portfolio.
Computed as per the following
formula:—
X = A × B ,
C
where,—
X = cost of acquisition of the
unit or units in segregated
portfolio;
A = cost of acquisition of unit
or units in the total portfolio;
B = Net Asset Value of the asset
transferred to the segregated
portfolio; and
C = Net Asset Value of the total
portfolio immediately before
segregation of portfolios.
Sl. No. Description of the capital asset Cost of acquisition
A B C
12. Capital asset being original units held
by the unit holder in the main portfolio.
The cost of acquisition of such
original units as reduced by the
amount as so arrived at under
serial number 11.
13. Capital asset, being shares as referred
to in section 70(1)( zl) which became
the property of the assessee.
The cost of acquisition to it of
the interest in the joint venture
referred to in the said clause.
14. Shares in the resulting company as a
result of demerger.
Computed as per the following
formula:—
X = A × B ,
C
where,—
X = cost of acquisition of shares
in the resulting company;
A = cost of acquisition of shares
in demerged company;
B = net book value of assets
transferred in demerger; and
C = net worth of demerged
company immediately before
demerger.
15. Original shares held by the shareholder
in the demerged company.
The cost of acquisition of such
original shares as reduced by
the amount so arrived at under
serial number 14.
16. Capital asset deemed to be chargeable
to tax according to the provisions of
section 71(1).
Cost for which such asset was
acquired by the transferee
company.
17. Capital asset being property, where the
capital gain arises from the transfer
of such property the value of which
has been subject to income-tax under
section 92(2)(m).
The value taken into account
under section 92(2)(m).
18. Capital asset declared under the Income
Declaration Scheme, 2016, where the
tax, surcharge and penalty have been
paid as per the provisions of such
Scheme on the fair market value as
on the date of the commencement of
that Scheme.
The fair market value of the
asset taken into account for the
purposes of the said Scheme.
Sl. No. Description of the capital asset Cost of acquisition
A B C
19. Specified capital asset referred to
in clause ( c) of the Explanation to
section 10( 37A) of the Income-tax
Act, 1961 (43 of 1961), which has
been transferred after the expiry of
two years from the end of the tax
year in which the possession of such
asset was handed over to the assessee.
The stamp duty value as on the
last day of the second tax year
after the end of the tax year in
which the possession of the
said specified capital asset was
handed over to the assessee.
20. Capital asset, being share in the project,
in the form of land or building, or both,
under section 67(14), not being a capital
asset referred to in section 67(16).
The amount deemed as full
value of consideration under
section 67(14).
21. Capital asset, being the asset held by
a trust or an institution in respect
of which accreted income has been
computed and tax paid thereon as per
section 352.
The fair market value of the
asset considered for compu-
tation of accreted income as
on specified date as per section
352(2).
22. Capital asset referred to in section
26(2)(j).
The fair market value for
section 26(2)(j).
23. Capital asset, being an Electronic Gold
Receipt issued by a Vault Manager,
which became the property of the
person as consideration of a transfer,
as referred to in section 70(1)(y).
The cost of gold for the person
in whose name Electronic Gold
Receipt is issued.
24. Capital asset being gold released against
an Electronic Gold Receipt, which
became the property of the person as
consideration for a transfer as referred
to in section 70(1)(y).
The cost of the Electronic Gold
Receipt for such person.
(2) For the purposes of the Table in sub-section (1), in respect of the entries against—
( a) serial number 1, “previous owner of the property” for any capital asset
owned by an assessee, means the last previous owner of the capital asset
who acquired it by a mode of acquisition other than that referred to in
column B thereof;
( b) serial numbers 11 and 12, “main portfolio”, “segregated portfolio” and
“total portfolio” shall have the same meanings as respectively assigned
to them in the Circular No. SEBI/HO/IMD/DF2/CIR/P/2018/160, dated
the 28th December, 2018, issued by the Securities and Exchange Board
of India;
( c) serial numbers 14 and 15, “net worth” means the total of the paid-up
share capital and general reserves as appearing in the books of account
of the demerged company immediately before the demerger;
( d) serial numbers 2, 14 and 15, the provisions as contained therein, shall,
as far as may be, also apply in relation to business reorganisation of a
co-operative bank as referred to in section 64.