Capital gain

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P K Agrawal (Querist)
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15 July 2015 x along with his two brothers sold an ancestral lands to y property developer at a consideration of rs 20 lac plus 40% of flats to be constructed, my query is how capital gain will be assessed in there hands and what exemptions Will be available

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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15 July 2015 Sale consideration is 20 lacs plus market value of 40% of flats. Based on this we have to calculate long term capital gain after reducing indexed cost.
Then we have to calculate 54F exemption on the flat allotted as per the provisions.

P K Agrawal

P K Agrawal (Querist)
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18 July 2015 Sir what will be the status of tax assessment, whether it will be assessed as HUF or individually in equal proportion of brothers and sisters as the land is acquired by father /forefather a decade ago and they are no more now.
And what will be year of taxation, the year when the land was given to developers, or the year when the flat is going to be completed in next 2-3 years. Because presently they have only parted with the land and nothing else other than 20 lacs has been received. But if we values the 40% of flat it will be around 3-4 crores, and it becomes unrealised at this point of time.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 July 2015 Take legal heir certificate based on which you are individually in equal proportion owner of the property.
The year of taxation will be the year you received 20 lacs and transferred the land to developers.
Capital gain exemption u/s 54F has to be calculated on the flat you receive.

P K Agrawal

P K Agrawal (Querist)
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18 July 2015 Sir to make it clear, I have a query that if the said land is handed over the developer in June 2013, then f Y 2013-14 will be considered as the year of taxation, while the flat to be handed over to them is in the year 2015-16 somewhere in Dec 15, so how we will value the cost of 40% of flat in June 2013, (should we go for the booking price of developer at that time and consider the flat consideration amount. And similarly for claiming exemption u/s 54F the investment in flat will be considered in the year 2013-14 while the flat is proposed to be handed over in Dec 15 or it may go further even a year ahead. So what will be practical difficulty in filing capital gain in the F Y 2013-14. Kindly may elaborate the same in step wise.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 July 2015 Yes fy 2013-14 will be considered as year of taxation. You can take booking value as consideration. For claiming exemption u/s 54F the investment may be considered in 2013-14. 3 years construction period is allowed you will not face any problem.

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