Capital Gain on House Property

This query is : Resolved

CA CS Akashdeep Singh (Querist)
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13 March 2009 Hello

I am facing the problem while computing the capital gain on house property.

PROBLEM

My client purchased house on 10 yearly installments. He took possesion in year of down payment. In current year he sold it. Now calculating the capital gain, indexation of which year be used i.e., wether i have to used index on each installment of same year.or used the index of year of down payment.

Example

Down Payment: 10,00,000 in FY 90-91

Ist Installment: 10,00,000 in FY 91-92

IIst Installment: 10,00,000 in FY 92-93

IIIst Installment: 10,00,000 in FY 93-94

IVst Installment: 10,00,000 in FY 94-95

Vst Installment: 10,00,000 in FY 95-96

Sale consideration : Rs. 2,00,00,000 in FY 2008-09

Index: FY 90-91=182, FY 91-92=199, FY 92-93=223, FY 93-94=244, FY 94-95=259, FY 95-96=281

Capital Gain

Sale consideration : Rs. 2,00,00,000

(-) Cost of aquistion

Down Payment: 10,00,000 X 582/182

Ist Installment: 10,00,000 X 582/199

IIst Installment: 10,00,000 X 582/223

IIIst Installment: 10,00,000 X 582/244

IVst Installment: 10,00,000 X 582/259

Vst Installment: 10,00,000 X 582/281

Total Cost 1,54,35,815

Long Term Capital Gain 45,64,185

ABOVE PROCEDURE IS TRUE OR NOT?

Provide me any case law regarding it, if u have?

CA. MITHUN KHATRY

CA. MITHUN KHATRY (Expert)
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13 March 2009 this is absolutely right. no judgement rquired for this.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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13 March 2009 What is the date of transfer of ownership as per land records and conveyance deed?
The answer would depend on it only.

CA CS Akashdeep Singh

CA CS Akashdeep Singh (Querist)
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14 March 2009 Hello..........actually i tell what is my case exactally:

My client purchased the house from DDA under DDA's SFS (self financing scheme). In such scheme, every applicant has to give some money in beginning and DDA used such money in construction of house and whenever DDA needs fund for the preparation of house, they demanded from applicant. In my case, ,my client gives the DDA five installments from 1986 to 1990, and in 1991 , DDA give the houses to applicant. DDA also gave the allotment letter at a time of first payment i.e., in 1986. My client sold such house in April, 2008 Suggest me what should be computation for it.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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15 March 2009 If ur client gave the instalments from 86 to 91 then what abt the above mentioned down payment and five instalments of 10 lacs each?

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