Section 51 of Income Tax Act for AY 2023-24

Updated notes on section 51 of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Advance money received.

Amended and updated notes on section 51 of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to advance money received.

Chapter IV (Sections 14 to 59) of the Income Tax Act 1961 deals with the provisions related to computation of total income. Section 51 of IT Act 1961-2023 provides for advance money received.

Recently, we have discussed in detail section 50D (fair market value deemed to be full value of consideration in certain cases) of IT Act 1961. Today, we learn the provisions of section 51 of Income-tax Act 1961. The amended provision of section 51 is effective for financial year 2022-23 relevant to the assessment year 2023-24.

In this article, you will learn detail of the provisions of section 51 of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962, regulations, notifications, circulars, orders and Press Release by CBDT, Income Tax Department and the Ministry of Law and Justice, Government of India.

Section-51: Advance money received

Where any capital asset was on any previous occasion the subject of negotiations for its transfer, any advance or other money received and retained by the assessee in respect of such negotiations shall be deducted from the cost for which the asset was acquired or the written down value or the fair market value, as the case may be, in computing the cost of acquisition :

Provided that where any sum of money, received as an advance or otherwise in the course of negotiations for transfer of a capital asset, has been included in the total income of the assessee for any previous year in accordance with the provisions of clause (ix) of sub-section (2) of section 56, then, such sum shall not be deducted from the cost for which the asset was acquired or the written down value or the fair market value, as the case may be, in computing the cost of acquisition.


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