Capital Gain

This query is : Resolved

Sateesh (Querist)
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13 November 2010 I Purchased Plot as on 1.1.2003For.Rs. 1,50,000/- later i entered into Developement Agrreement as on 1.5.2008. after completion of Developement they alloted 5 flats in consideration of my share of land.

out of 5 flats i sold one flat as on 1.4.2009 for Rs. 8,00,000/-

Market value of Flat as on 1.5.2008 Rs. 7,00,000/-

1. How capital gain calculated and when it will pay

2. suppose one flat given for rental. then what about the caoital gain?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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14 November 2010 As far as Q No 2 is concerned, there is no transfer of capital asset, hence there will be no capital gains.

For answering Q No 1, you are requested to provide brief of the Development Agreement, like No of Flats Constructed, Manner in which other flats have been sold and other relevant details.

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CA.Madhusudan B.P.

CA.Madhusudan B.P. (Expert)
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14 November 2010 Mr.Sateesh,

All depends on how the Joint Development Agreement was done for the purpose of Capital gain tax.

When you are letting the flat for rent, there no transfer of asset, henco no capital gain tax, But remember the income received as rental shall be taxed under the head "Income from House property"

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NITIN SHARMA

NITIN SHARMA (Expert)
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15 November 2010 Agree with both of senior experts in respect of Q 2. In respect of Q 1. I would like to say for the capital gain purpose market value is not considered the ciecle rate of land plus the cost of construction as provided by the stamp duty is considered.

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