Capital gain on flats sale

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CA Sarvesh Gureja (Querist)
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28 August 2012 Dear Experts

Please guide for below situation
An ancestral property purchased in 1979 has been convertedc from agricultural to residential.
Now a construction project is going on under an agreement with developer to build flats on the same.
Please explaib tax implications
1. When will capital gain arise on sale of flats or now at the time of construction
2.What exemption can be claimed
3. What will be sole consideration
4. Whether cost of conversion can be taken as cost of improvement
5 Can assessee gift all his share to his sons without attracting tax

According to a case law, land and flats are two different assets and should be taxed accordingly

Please clarify

Regards

Soumitra Basu

Soumitra Basu (Expert)
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02 September 2012 1. Difference between the sale proceeds and the indexed cost of construction.
2. Section 54, 54F and 54EC
3. It can not be said
4. Debatable issue.
5. No gift tax. But capital gain tax has to be paid.

CA Sarvesh Gureja

CA Sarvesh Gureja (Querist)
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03 September 2012 1st ques was when will capital gain will arise in which AY it will be taxable.. In yearof sale of flats or now at the time of agreement

And can the developer apply for loan in any bank on my property on account of attorney holder of 60% share in the sale proceeds

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