Sale of lease land

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 July 2013 Dear Sir,

Sale of lease land after 3 years considered for long term capital gain ? if yes how much will attract?.

Thanks & Regards
Mr.Lingam

Rupesh Jain

Rupesh Jain (Expert)
Follow

29 July 2013 yes it is fall under long term capital gain

take index cost of land and sale consideration
and calculate LTCG

Querist : Anonymous

Querist : Anonymous (Querist)

29 July 2013 It is commercial property not taken any depreciation still it considered for LTCG or STCG(regular income) ?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

22 July 2025 Here’s a clear explanation about **sale of leasehold land** and capital gains treatment:

---

### Is Sale of Lease Land after 3 Years Subject to Long Term Capital Gains (LTCG)?

* **Yes**, sale of leasehold land held for **more than 36 months** (3 years) qualifies as **Long Term Capital Asset**.
* Hence, the gain from sale will be **Long Term Capital Gain (LTCG)**.

---

### How to Calculate LTCG on Leasehold Land?

* **Capital Gain = Sale Consideration – Indexed Cost of Acquisition**
* Use **Cost Inflation Index (CII)** to adjust the purchase cost for inflation.
* Leasehold land is treated the same as freehold land for LTCG purposes.
* No depreciation is claimed on land, so cost remains purchase price.

---

### Commercial Property vs. Leasehold Land:

* If it is **commercial leasehold land**, **still qualifies for LTCG** if held over 3 years.
* No depreciation impact on land — land is not depreciable under Income Tax Act.
* So, sale proceeds minus indexed cost will be LTCG.

---

### Summary Table:

| Condition | Result |
| ---------------------------------- | ------------------------------ |
| Leasehold land held > 3 years | LTCG applies |
| Leasehold land held ≤ 3 years | Short Term Capital Gain (STCG) |
| Commercial property leasehold land | Treated same as leasehold land |

---

If you want, I can help you with a sample calculation or capital gains tax planning tips for this sale!

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now