Sale of Slum Hut-LTCG

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An individual sold a slum hut in Mumbai for Rs. 22,50,000 in FY 2022-23, having purchased it in May 2012. Despite no formal registration or valuation for slum properties, they reported a Long Term Capital Loss (LTCG) of Rs. 3,15,000 in their income tax return. The query concerns potential Income Tax inquiries regarding this loss. The response suggests that if the purchase value of Rs. 15,50,000 can be substantiated with authentic documents, there should be no cause for concern, and the filed ITR already allows for carrying forward the LTCG loss.

NK1976

NK1976 (Querist)
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28 July 2023 Dear Sir,
In the financial year 2022-23 a slum hut in Mumbai was sold for Rs.2250000, which was purchased on May-2012. There is no registration and stamp duty for slum huts in Mumbai. There are no valuation reports for this slum Sale.

My question is if I have shown loss of LTCG Rs.315000/- in income tax return then there can be any inquiry from Income Tax?

Please reply your valuable advice in this regards.

Thanks & regards
N Kadam

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 July 2023 How did you arrive at loss of Rs. 3,15,000?

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NK1976

NK1976 (Querist)
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28 July 2023 The Cost of Acquisition is Rs.1550000--May-2012
The Sale Consideration is Rs.2250000--Sept-2022
Indexed cost is Rs.2565250
Capital Gain -- -(3,15,250)

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 July 2023 Even if any inquiry be raised, if you have authentic documents along with payments substantiating purchase value of Rs. 15,50,000/- then why worry?

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NK1976

NK1976 (Querist)
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01 August 2023 ITR filed and intimation received under section 143(1) allows LTCG loss to be carried forward to future years.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 August 2023 Congrats..

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