Long term capital gains

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prerna prakash (Querist)
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27 August 2017 DDA LIG flat purchased in 1970 for rs 20000 (land costs rs 4500).
first floor constructed in 1977 for rs 1 lacs and ground floor renovated in 1980 for rs 1.5 lacs

now, full house demolished in may 2012 and new construction started in oct 2012 and completed in august 2013 .the construction cost was rs 65 lacs.

full house sold in august 2017 at a price of rs 1.22 crores
pls guide me regarding how to compute the capital gains arising from this sale???????

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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27 August 2017 There are two parts to your query - land aspect and building aspect. From the selling price, cost of the land must be separately indexed and cost of the building (construction cost after demolition i.e rs.65 lacs) must be separately indexed.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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27 August 2017 Note: Cost incurred on constructed in 1977, renovation in 1980 can not be considered as the asset has been fully demolished.

prerna prakash

prerna prakash (Querist)
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28 August 2017 In this case how to index land as per latest indexation scheme

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 August 2017 4,500 /100 X 272 is the indexed cost oer notification 44/2017 of 5.6.2017.

prerna prakash

prerna prakash (Querist)
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28 August 2017 Thanks for your interest Sir But i have a confusion that wether we should go for above indexation as per your calculation or we should go for the fair market value of land as on 2001 ???

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 August 2017 FMV is to be indexed per explanation (iii) to section 48. I stand corrected.

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