Long term capital gain on sale of property ?

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Querist : Anonymous

Querist : Anonymous (Querist)

30 April 2018 Dear Friends,

One of my client has bought land for Rs. 3,20,000/- of 4000 sq. ft. in Apr-2002 and he went to joint venture the same in 2009. In the joint venture the total building built area is 15,100 sq. feet.

The property has been divided 8758 sq.ft. for others(investors) and 6342 sq. feet for my client(only land). Out of this 6342 sq.feet I got the 4 two bedroom flats and one three bedroom flat and have an excess sq. feet of 607. For this 607 sq.feet the builder gave money Rs 2000/- per sq.feet. But, he never gave to my client the money and he used all of this money for the building materials to build the my flats such as Tiles, Teak wood doors, shelves , electricity works, and fans etc.

After finished construction the property value is Rs. 85.62 lacs in 2009 for my client of 4 two bedroom flats and one three bedroom flat.

Now, he is decided to sale his 1 nos. three bedroom flat which is 1950 sq.ft. and guideline value Rs. 63.37 lacs.
So, my question is how would we calculate capital gain tax for this? because, he bought land in 2002 and he went to joint venture 2009. is this joint venture can treated as expenditure cum sale of a part of property or sale cum buying of property?

kindly help me, which is correct and what is the correct capital gain tax amount?

Thanks in Advance,
Vasudevan

ND (Expert)

01 May 2018 Please refer to Section 45(5A) & 49(7). The capital gain on sale of this flat will be calculated as under:-
1. The Cost of acquisition of this flat will be Fair Market Value of the flat on the date when it was constructed and the possession was given to your client. From this date and cost, the period of holding will be determined as well as the indexed cost of acquisition.

Querist : Anonymous

Querist : Anonymous (Querist)

02 May 2018 Thanks for your reply,

The above said law is for an ordinary sale of flat. But, my case is in joint venture sale. So, I request you to provide any articles or laws pertains to join venture or joint develop scheme.

Thanks in advance for your reply.