Capital gain on conversion

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 June 2012 respected sir

i have an ancestral property and i have given it to a builder for construction and after the construction the builder has given me my share.and now i want to sell a flat from my property.and it is a long term capital gain and a sale of land and building.i can take the cost of the land as a fair market value as on 1/4/81.but i don't know what will be the treatment with the cost of the building.as i have got i my share.......

so can u please help me by telling about the cost of the building will be taken for computation of capital gain..

with regards
mohit

Hitendra Jain

Hitendra Jain (Expert)

03 June 2012 First Cost of land & Building as on 1 April 81 is relevant only if you have got title of the property under a will or gift or partition before 1 April 81.

You have to determine indexed cost of acquisition for the year in which you first become the owner of the property or fair market value on 1 April 1981.

Apply % Share of your entitlement that builder has given to you. In this amount add the following:

Index the cost of construction of old premise and apply % share of your entitlement that builder has given to you.

Now this become the cost of the property under your possession.

Determine the % share of flat you transfered.
Apply this % on the cost of the property under your possession.

Deduct it from the sales consideration. also deduct any expenditure on transfer.

Result will be long term capital gain or loss.

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