Sale of lease land

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

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### 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)**.

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### 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.

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### 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.

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### 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 |

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

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