Capital gains

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murali krishna moolmuri (Querist)

18 January 2014 Dear CA club India members ,
My doubt is that I had sold a flat, the details of which are as below:-
Amount received from buyer: Rs.32,00,000
Date of Sale Registration: 3rd November, 2012

I had bought a plot, the details of which are as below:-
Amount paid to seller: Rs.39,78,000
Date of Sale Registration: 9th November, 2012

We will be building a house in the plot in the next few months.
The flat that I mentioned to you about earlier, was bought on 16th June, 2005 for Rs. 25,67,000 by my parents and gifted to me on 28th July, 2012. I sold the flat in November, 2012 for Rs. 32,00,000.

During our stay there, we had extended the kitchen and done a few other changes in the house which costed about Rs. 5,00,000.
please help me the calculation of capital gains if it is attracted

AVTAR SINGH

AVTAR SINGH (Expert)

18 January 2014 Section 2(42A) defines ‘short-term capital asset’ which means a capital asset held by an assessee for not more than thirty-six months immediately preceding the date of its transfer. Thus the assets, which have been already held for more than 36 months before it is transferred, would not be short-term capital assets. Section 2(29A) defines ‘long-term capital asset’ means a capital asset, which is not short-term capital asset.
But for property acquired in any mode given under section 49(1) (e.g. by way of gift will, etc..), the holding period of previous owner is also included.
Therefore the Gain on sale of Flat would be Long Term Capital Gain and full exemption u/s 54 would be available to you.

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