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How do i capital gain on sale of house property?

dhruv patel (ca) (75 Points)

01 October 2013

We have a very old property as our residence in present, and now we are going to recunstruct a new building, and we also wants to sale some of the flates. But the question is, How i calculate the capital gain, as short term by showing the new constrution or long term by showing addition in the old property??? THANK YOU....in advance

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4 Replies

(Guest)

This event partly comes under conversion of capital asset into stock in trade

CA Pallav Singhania (❤ Work Hard Party Harder ❤) (32532 Points)
Replied 01 October 2013

Selling part of the property in your case its a long term property,

you can claim indexation benefits,

Selling such flats attracts long term capital gain,

You can claim exemption U/S 54 and in 54EC...

However, Such capital gain must be invest in a new property or in NHAI or RECL bonds for exemption from long term gain...

CA Mitesh N Kothari (9821662799) (391 Points)
Replied 01 October 2013

it will be treated as asset converted to stock in trade valued at current market price.

Taxable as long term capital gain at current market price

and difference between sales consideration and current market price will be treated as income form Business.

if it is not for business purpose then it will taxable as long term capital gain.

dhruv patel (ca) (75 Points)
Replied 01 October 2013

Thanks to all of you for your valuable answers ..... i also wants to know that is indaxation is aplicable on the addition i. e. on new building , which still not a long term addition