capital gain tax - land given for developement

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ANWAR DAMANWALA (Querist)
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20 February 2010 pls see following case.

Mr. A has purchase land in F.Y.2001/2002 for Rs.100000-

he has given that land for developement to XYZ Co. in F.Y.07/08.

Mr.A got Rs.2,00,000- + 5 flats (2500 sqf). from XYZ co. as consideration.

Mr.A recd. Rs.200000- in F.y.07/08.

But the bldg. get complete in F.Y.08/09 he got ready 5 flats in the month of Dec-09.

Mr. A sold that all 5 flats to customers in F.Y.09/10.

in above case pls tell...
1) in which f.y. Mr.A has to pay i. tax?
2) he will get LTCG benifit or not?
3) how his tax liability will calculate.

Thx
Anwar
9823548882

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)
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22 February 2010 Because Actual consideration for Land is Rs. 20,00,000 + 5 Flats, therefore, amount of sale considration for land is Rs. 20,00,000 + Fair Market Value(FMV) of flats.

As given in Capital Gain chapter that whenever we will receive first installment of Sale consideration(here Rs. 20,00,000), then computaion of capital gain will be in the hands of assessee. Therefore, in the year os 2007-08 computaion should be in the hands of assessee for whole consideration.

2) For the those 5 sold flats there will be STCG, because held less then 3 years.

3)For land Computation will be:

Sale Consideratoin = Rs. 20 lac + FMV of 5 flats
(-) Indexed COA of land =__________
LTCG =

for 5 Flats, computation will be:

Sale Consideration = Amt. received from buyers
(-) Cost of Acquistion = FMV of flats on the date of acquisition.
STCG =

Regards!!!
Dinesh S. Adhikari

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