26 June 2008
My friend had sold a old land long term asset and invested for the construction of house in kochi during the financial year 2007-08. Problems is whether that amount should be used for reconstruction/construction of house? how can it treat with preparing total income during the financial year 2007-08. It will be taxable during the year.The old value (93-94) around 1.8L and the current sale value Rs.10L. How can it treated in Total income statement 2007-08, how was the treatment or any exemption there ?what is your suggestion on this matter.
26 June 2008
LTCG will be taxable in the year in which ur friend sold the land.
cost of purchase will be taken after adjusting for indexation.
capital gain can be saved thru construction of new house within 3 years of sale.
if he could not complete construction in 2007-08, he can deposit the money in special bank a/c named capital gain a/c and later use this money for construction.
CAclubindia
