Capital gain on conversion (Income Tax)

This query is : Resolved

Author : Anonymous

( Author )
03 June 2012

respected sir

i have an ancestral property and i have given it to a builder for construction and after the construction the builder has given me my share.and now i want to sell a flat from my property.and it is a long term capital gain and a sale of land and building.i can take the cost of the land as a fair market value as on 1/4/81.but i don't know what will be the treatment with the cost of the building.as i have got i my share.......

so can u please help me by telling about the cost of the building will be taken for computation of capital gain..

with regards
mohit

Hitendra Jain

( Expert )
03 June 2012

First Cost of land & Building as on 1 April 81 is relevant only if you have got title of the property under a will or gift or partition before 1 April 81.

You have to determine indexed cost of acquisition for the year in which you first become the owner of the property or fair market value on 1 April 1981.

Apply % Share of your entitlement that builder has given to you. In this amount add the following:

Index the cost of construction of old premise and apply % share of your entitlement that builder has given to you.

Now this become the cost of the property under your possession.

Determine the % share of flat you transfered.
Apply this % on the cost of the property under your possession.

Deduct it from the sales consideration. also deduct any expenditure on transfer.

Result will be long term capital gain or loss.