Long term capital gain calculation of purchase cost

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This discussion explores the calculation of long-term capital gains for land purchased in 2008. The land was initially registered under another person's name due to SC land issues. Subsequent agreements in 2017 and 2025 involve payments of Rs. 10 lakh and a total settlement of Rs. 17 lakh. The core question is how to determine the capital gain, specifically whether the Rs. 10 lakh agreement cost or the remaining Rs. 7 lakh can be included in the purchase cost for tax purposes.

Suman Panwar

Suman Panwar (Querist)

04 September 2025 My client purchased a land in 2008, but they registered it in someone else's name as the issue of SC land was involved. So, they purchased it for Rs. 5 lakh. Now, in 2017, they made an agreement with that person and paid Rs. 10 lakh to him that they will settle down it for Rs. 17 lakh. And Rs. 7 lakh was left. Now, in 2025, if they want to transfer it in their own name or they sale that property, how much will be the long-term capital gain and what will be the impact? Can the cost of agreement that is Rs. 10 lakh or Rs. 7 lakh be included in purchase cost?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

04 September 2025 All the transfer documents need to be verified, but from the available information capital gains should be calculated based on Rs, 17 lakhs paid in 2017.

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

20 September 2025 Good Luck..

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