Capital gain tax computation on property

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Querist : Anonymous

Querist : Anonymous (Querist)

23 March 2011 My father bought a land in 1980 and constructed a home on it. In 2006, me and my brother inherited the property after my father's death. The house has 3 floors. if i sell one of the floors for Rs 30 lac, how will the capital gain tax be computed? I do not have any proof or document for the amount spend on the construction of the house.

CA Namrata Dedhia

CA Namrata Dedhia (Expert)
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23 March 2011 I understand that the construction was completed prior to 1st April 1981. If that is the case, even though you do not have proof or document for amount spent on construction, you can use the fair market value of the house as on 1st April 1981 as cost of the house and calcuate capital gains by reducing proportionate amount of that fair value from the sale consideration.

For fair value, you may use the stamp duty reckoner or municipal valuation as on 1st April 1981

CA. Lohith Jagadeesh

CA. Lohith Jagadeesh (Expert)
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31 March 2011 Hi,

Can you please provide further information as to whether the 3 floors was constructed before 01/04/1981,

i.e whether the 3 floors was constructed in the same year of purchase of Land in 1980 or some time after 01/04/1981?

Regards

CA. Lohith. J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons

Querist : Anonymous

Querist : Anonymous (Querist)

01 April 2011 Actually the land was bought in 1975 and one floor was constructed in 1975. Rest of the two floors were constructed in 1980.

CA. Lohith Jagadeesh

CA. Lohith Jagadeesh (Expert)
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03 April 2011 Hi,

If the Property of entire 3 floors was constucted before 01/04/1981 there wouldnt be much of complications, you could take the fair market value (FMV) of the Property as on 01/04/1981 and make calculations of Capital Gains. there will be no requirement of any documentations.

you could find the FMV at the Sub-Registrar's office having Jurisdiction of the Property.

Thank you,

Regards
CA. LOHITH.J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons

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