Long Term capital gain

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Mr. X bought a flat for £23 lakhs, but the Sale Deed was registered at £9 lakhs. He paid the full amount via LIC loan in 2011 and now wishes to sell for £37 lakhs. The question is whether to use the actual purchase price (£23 lakhs) or the registered Sale Deed value (£9 lakhs) for indexation purposes when calculating long-term capital gains. The consensus is that the Sale Deed value of £9 lakhs should be considered the cost of acquisition for tax purposes.

G.Veerabadran

G.Veerabadran (Querist)
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30 January 2021 Mr X had purchased a flat for 23 lakhs but the Sale Deed value is only 9 Lakhs. Agreement to Sale shows the Value as 23 lakhs and the money paid through LIC Loan ( Having all the Proof of payment) in the year 2011.

Now he wants sell the property for 37 lakhs. For Index the cost of the Flat whether 23 lakhs ( Actual cost ) or the Registered Value of Rs. 9 lakhs ( Sale deed value ) to be considered.

Please clarify .

VEERABUDRAN