Capital Gain

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Richa (Querist)
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23 March 2011 Good Afternoon to all..I hv a querry.. can anybody tell me the solution pls...........

My Querry is - An Assessee has purchased a land in the year of 2005 for Rs. 178000 and then construct a house on it in the year of 2008 for Rs. 450000. and after that he sold it for Rs. 936000 in the year of 2010. How will we treat the capital gain for the same....
Pls reply its urgent......

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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23 March 2011 Land and building may be viewed as separate assets for the purpose of determining LTCG /STCG ,in this transaction, depending on the period of holding of the respective assets.
Madras high court in the Case of Dr. Ramachandra Rao took this view.

Richa

Richa (Querist)
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23 March 2011 Thanks B. Chackrapani Sir.....bt can u pls tell me the case and from where i can view for the same?

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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23 March 2011 If the consideration is composite nature then and assume that Building is a short term capital asset how will be the Capital gain calculation?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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23 March 2011 The said case can be referred in [1999] 236 ITR 51 (MAD).

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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23 March 2011 Can you tell me briefly how we are calculating short term and long term capital asset based on full value of consideration

Richa

Richa (Querist)
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23 March 2011 For B.Chackrapani- sir i cant understand it.kindly explain it.

and for Vivek Sir - As per my opinion we can devide the sale consideration in the ratio of cost of land and building... isn't it?

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