Cost of asset acquired before 1 April 2001 can be substituted by:
AOriginal cost only
BFMV as on 1 April 2001 at assessee's option (per relevant Section)
CStamp duty value at acquisition (per relevant Section)
DReduced cost
Answer & Solution
Correct answer: B. FMV as on 1 April 2001 at assessee's option (per relevant Section)
1. Section 55(2)(b) allows substitution of FMV on 1 April 2001 for cost of acquisition.
2. Shift from 1 April 1981 to 2001 by Finance Act 2017.
3. For land/building, FMV cannot exceed SDV as on 1 April 2001 (FA 2020).
_Source: ICAI BoS CA Final Paper 7, Ch 4 "Capital Gains"_
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