Determination of cost for capital gain

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 July 2013 My father in law got the 3 rooms constructed in the bunglow. They paid the compensation to the owner of the bunglow but my father in law did not get the ownership of those 3 rooms because the plot on which the bunglow was constructed was given to the owner by the municipal corporation on a long lease as the owner was flood affected. My father in law got the MSEB connection in his name but the property tax was being paid by the owner of the bunglow
My father in law paid the price for the 3 rooms but not by single payment but they paid during 2 to 3 years of time. Some amount was paid in lumpsum, some was paid on different occasions & the balance was paid as a monthly instalment. They got the possession immediately after the construction was over even though the full price was not paid to the owner. The payment was complete in 2004 & in total they paid about 5 lakhs as a cost of house.
In Mar 2013, they surrendered these 3 rooms to the owner & in return they got compensation of about 13 lakhs

So I have following questions-
Is capital gain applicable?
If capital gain is applicable, how to determine the cost of acquisition & how to work out the indexed cost of acquisition since the payment was made on number of times & that too in different years

Rupesh Jain

Rupesh Jain (Expert)

23 July 2013 sale of date and date of possession will considered and if diff more than 3 year then it will be LOng term capital gain other wise short term gain

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