Capital gains calculations

This query is : Resolved

P.karthik (Querist)
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27 September 2010
Sir,

a propert owner entered into a joint venture agreement with a builder. The terms of the agreement is as follows:-
1. The owner auhorises the Developers to construct a new building in the property admeasuring 3360 Sq.Ft. and the Developers shall allot 54% built-uo plinth area in the proposed building construction and in addition the developers shall also pay a sum of Rs.22 lakhs to the owner and the owner shall refund the above said amount of Rs.22 lakhs to the developers at the time of completing the project and at the time of handing over the built-up area and the developer shall retian 46% built up plinth area in the proposed building for themselves and in consideration of such development and allotment the owner has agreed to transfer 46% Undivided share in the land .
What is the capital gains tax liability for the owner of the property?

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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28 September 2010 Property owner has sold only 46% of the land. cost of acquisition of 46% of the land will be calculated as per the value of purchase and index.

Sale consideration will be value of new developed house. That will be calculated by various means fairly otherwise AO will appoint valuation officer.

Rs. 22 lakhs has been given as security deposit. this will not be treated as sale consideration since it is refundable.

P.karthik

P.karthik (Querist)
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28 September 2010
Thank You Sir

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