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CA kanchan b gupta (Querist)
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10 February 2011 what will be the treatment for sale of one of the 4 flats build on a plot of land by demloishing previous one storeyed building? whether cost of demolition of previous house build be added in cost of acquisition/improvement? and how do we arrive at cost of one flat sold in May 2010 out of four flats constructed.Also whether Indexed cost of acquiring land be added to cost of construction of four flats and thereby taking 1/4th propotionately thereby for cost of acq/cons/improvement for one flat sold.?

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)
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11 February 2011 Firstly,off course cost of demolition will be added in cost of improvement, becuase without demolishing constrution was not possible.

Secondly, Cost of one flat should be 1/4 of total construction cost.

Thirdly, because when we sale any flat then value/price of that flat also include value of Land, therefore as per my opinion Cost of Acquisition of that sold flat should be 1/4 of total indexed cost of acquisition there for capital gain computation.

However, let the other experts show their opinion.

Regards!!!

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