Plot of land. Cost of Acquisition
This query is : Resolved
Sunil Bali
(Querist)
26 June 2026
Hello CA Club India.
I purchased a piece of land through a developer for X Lacs a few years back. The piece of land (plot) was registered in my name by the Sellers who were the direct owners of the piece of land, not the developer. The amount in the registered deed is Y Lacs which is less than X.
The developer has provided receipts for the X Lacs and given details of plot number etc. but as they are the developer they didn't show the payment made to the direct owners.
Now, as I am selling the plot, my CA is telling me that the cost would be Y not X which was paid to the developer. The developer received X Lacs which included developing the land (roads, demarcation, water supply, electricity etc.) However, as there is no indication of direct payment to the land owner, the CA is not able to provide me a plan for the LTCG.
How do we compute the LTCG in this case? Based on X Lacs which was actually paid by me or Y Lacs for which the registration was done.
Regards.
I purchased a piece of land through a developer for X Lacs a few years back. The piece of land (plot) was registered in my name by the Sellers who were the direct owners of the piece of land, not the developer. The amount in the registered deed is Y Lacs which is less than X.
The developer has provided receipts for the X Lacs and given details of plot number etc. but as they are the developer they didn't show the payment made to the direct owners.
Now, as I am selling the plot, my CA is telling me that the cost would be Y not X which was paid to the developer. The developer received X Lacs which included developing the land (roads, demarcation, water supply, electricity etc.) However, as there is no indication of direct payment to the land owner, the CA is not able to provide me a plan for the LTCG.
How do we compute the LTCG in this case? Based on X Lacs which was actually paid by me or Y Lacs for which the registration was done.
Regards.
26 June 2026
The LTCG should be computed using the entire ₹X Lacs actually paid. The amount ₹Y from the registration deed acts as the Cost of Acquisition, while the remaining balance ₹(X - Y) paid to the developer qualifies as the Cost of Improvement. Ensure you back this up with the developer's receipts, bank statements, and the development agreement to successfully claim the full cost during indexation.
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