Capital gain

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Querist : Anonymous

Querist : Anonymous (Querist)

11 August 2015 sir,
Land purchased in a date, and building construction is completed after 3 years. Then while calculating log. term capital gain the cost of improvement(building) can take indexation from which date..? from completion date....?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 August 2015 Indexation can be done considering the dates of payments made for construction.

Querist : Anonymous

Querist : Anonymous (Querist)

11 August 2015 thank u Sir , But,if the party not keeping any records for their payments throughout the whole three years , then what is the practical way to compute the indexed cost of improvement...?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 August 2015 See the bank statements.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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11 August 2015 Land and building has to be treated as separate capital assets. Building should not be considered as improvement. In the given situation,year of completion of the building is the determining factor for indexation.

Querist : Anonymous

Querist : Anonymous (Querist)

11 August 2015 thank u sir,
then we have to separate the land and building, it may be long term & short term in the particular circumstance...?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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11 August 2015 Yes.
Citation :- CIT Vs. Dr. D.L.Ramachanra Rao
(1999) 236 ITR 51 (Mad).

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