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Capital gain

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Querist : Anonymous

Querist : Anonymous (Querist)

02 August 2011 I had purchased a Land in June'2001 and constructed a residential house thereon completed in Nov'2010 and sale the house in June'2011. Let me know the date of aquisition and tax treatment whether Short Term or Long Term Capital gain? Also the Tax rate?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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02 August 2011 1. Assuming the land as basic capital asset, calculate indexed cost of acquisition of land from the cost of the land.

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2. The Construction carried on it is may be treated as cost of improvement, which may also be indexed in reference to the Cost Inflation Index of FY 2010-11, or earlier year in which improvement cost has been incurred.
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3. The total of the above 2 items is taken as Total Cost of Acquisition.

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4.The capital gains will be treated as Long Term capital gain and will be eligible for exemption U/s 54.

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Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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02 August 2011 The cost of land and the cost of construction prior to 36 months before the date of sale shall be available for indexation. Within 36 months before sale, no indexation. The resultant gain shall be long term capital gain.

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