Capital gains

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Rohit (Querist)
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24 March 2015 Hi..all. I hv a question...? Mr. A has a open plot of land. Mr. B is a builder and he constructs bldg of 8 floors on that land and gives 1st 2 floors to Mr. A for free and sells remaining floors to outsiders. What are the implications of Capital Gains in the hands of Mr. A ? Take the land value 17000/- purchased in 1981 and builder came in 1991 and the market value per floor is 50lakhs at that time. Points to think? Mr. A is still the owner of plot. What is transferred is.. the development rights

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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24 March 2015 Mr. A got 2 floors, market value is 1 crore. If A is still owner of the plot then there is no sale hence no capital gain will arise. Entire value is taxable.
Normally 6/8 of the land will be transferred for 2 floors of market value 1 crore. In this case capital gain can be calculated and exemption can be claimed u/s 54F if eligible.

Rupesh Jain

Rupesh Jain (Expert)
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24 March 2015 sale value to be consider and value of land and construction cost its is taxable as business income.

and capital gain on date of tfr of land for construction of building.

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