Capital gain

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divyang (Querist)
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05 December 2011 I sold land in Mrc 2011 for 1 crore. but i recd onl 25 lacs bfore Mrch-2011.balane amt will be recd in jan-2012.MY question is (1) ON which amtCapital Gain Tax to be paid in F.Y.2010-11. whether 25lacs or 1 crore. Why?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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06 December 2011 Capital Gain is chargeable on accrual basis, which means once the asset is sold, capital gain is levied on the full amount, irrespective of the fact whether full amount has been received or not.

So, capital gain will be attracted on Rs. 1 crore in FY 2010-11 itself.

divyang

divyang (Querist)
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06 December 2011 But later on if i didnot get balance Amt of Rs75 lacs or recd only rs. 50 lacs for full& final Amt. Then what happened, if I alredy paid Capita Gain on Rs.1 crore.

Guest

Guest (Expert)

06 December 2011 Long term Capital Gains Tax is levied on the excess between the sale price of the land or the fair market value minus the price at which the land was acquired. It is not based on the realization proceeds which you are expected to recover in full.

Prof. Bajaj

Prof. Bajaj (Expert)
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06 December 2011 In my opinion, you will have to pay Capital Gains tax in FY 11-12, the year in which the sale deed is registered (which is usually registered only after one receives the full payment).

Thus, the Rs. 25 Lakhs with you in March 2011 will just appear as an advance in your balance sheet and you need not pay any tax on the same in FY 10-11.