Long Term Capital Gains Tax

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Querist : Anonymous

Querist : Anonymous (Querist)

27 October 2010 I have inherited a house with my brother. The said house was built by my father in 1976 and total money spent by him was Rs 1.9 Lacs which was accepted by IT authorities in his IT return of the specific year.
Now both my brother and self have decided to give the house to a builder who would give both of us one flat each and keep 2 flats which he would sell.Besides he would give 1Crore to each of us.
The market price of each flat in the building which the builder would construct is 2Crores.
I would be grateful if some Chartered Accountant who is an expert in Capital Gains could advise what would be capital gains for each of the two brothers. Needless to mention that none of us have house in our name in Delhi where the property exists.

taxindiaconnect

taxindiaconnect (Expert)
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27 October 2010 The sale price for the property agreed between you and the builder is 6 Crore, being the market value of two flats and Rs 1 Crore each in cash. The capital gains tax would be calulated in this price if this is higher then the value of the property assumed by stamp regisration authorities.

The sale price for the property agreed between you and the builder is 6 Crore, being the market value of two flats and Rs 1 Crore each in cash. The capital gains tax would be calulated in this price if this is higher then the value of the property assumed by stamp registration authorities.

Captial gain computation in each hand would be Rs 3 crore - 50%* the indexed value of house value as on 1st April 1981. You need a certificate from a valuer from the valuation of property as on 1st April 1981.

There is a possibility that the capital gains can be non taxable to the extent of 2 crore treating that this sum has been invested in the construction of a house with other conditions being satisfied.

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Querist : Anonymous

Querist : Anonymous (Querist)

27 October 2010 Hi Sir,
Thanks for the reply. However I am not clear as the builder is giving two flats and 2crores. But he is building 4 floors and selling 2 floors in the open market at 2 crores each. What would be tax implication on that

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