CAPITAL GAIN ON LAND ACQUISITION

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rz's (Querist)
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18 May 2011

iam filing ITR 2 for a salaried individiual AY 2011-12...The assessee has recieved compensation on land/house acquisition by NHAI... After Indexing his Capital Asset works out to be RS. 405270..he is recieved a compensation of 412042...his capital gain is 6772...

Now I hav two Questions

1.) In the Long term Capital Gains Schedule , Coloum B.2.b(i) HAS "COST OF ACQUISITION AFTER INDEXATION' and the Next Coloumn has 'COST OF IMPROVEMENT AFTER INDEXATION".....i want to knw if the cost improvement means the cost house or structure that is build on it....or is it that the entire cost that is the indexed cost of land and structure should be mentiontioned in "COST OF ACQUISITION AFTER INDEXATION'

2. IN THE EFILING FORM THERE IS NO SPECIFIED COLUMN TO CARRY OUT THE NON INDEXED COST OF ACQUISITION...THE FORM TAKES ONLY INDEXED COST...HOW WILL THE CPC DETERMINE WETHER OR NOT THE CAPITAL GAIN CALCULATED IS CORRECT???

I AM CONFUSED WETHER I SHALL EFILE THIS CASE OR MANUAL...

DO GIVE YOUR OPINIONS...

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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21 May 2011 Query- 1.) In the Long term Capital Gains Schedule , Coloum B.2.b(i) HAS "COST OF ACQUISITION AFTER INDEXATION' and the Next Coloumn has 'COST OF IMPROVEMENT AFTER INDEXATION".....
i want to knw if the cost improvement means the cost house or structure that is build on it....or is it that the entire cost that is the indexed cost of land and structure should be mentiontioned in "COST OF ACQUISITION AFTER INDEXATION'

Ans- If the assessee has purchased land in
, say, Mar 2001 and later on construction has been carried out by him till Mar 2003.
In such a case Cost of Acquisition will be the cost of land. Construction Cost can be treated as Cost of Improvement.
Indexation may be done accordingly and shown under the requisite item of the Return.
Since amount of LTCG is not significant your case you may proceed in this manner.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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21 May 2011 Query-2. IN THE EFILING FORM THERE IS NO SPECIFIED COLUMN TO CARRY OUT THE NON INDEXED COST OF ACQUISITION...THE FORM TAKES ONLY INDEXED COST...HOW WILL THE CPC DETERMINE WETHER OR NOT THE CAPITAL GAIN CALCULATED IS CORRECT???

Ans.- In case of LT Capital Asset indexation
is allowed. CPC has not provided the column of Acquisition Cost and year of purchase of asset as such. The ITRs are not perfect in all senses.

In the given circumstances , in the desired cases, the jurisdictional AO can be told to obtain further information.

rz's

rz's (Querist)
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23 May 2011 i agree with your opinion sir..i was thinking on the same lines.. thnks for your reply..

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