CA not deducting cost of acqusition for LTCG Tax calculation on agricultural land?

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Hi,

I am buying a property (4 Acres of Agricultural land) from a friend from same village as myself. This land is about 2kms from the municipal limits of a Town (Population of 1.50 lakh). Friend acquired the land via a gift deed from his grand father in 1977.

My friends CA is not deducting the cost of acqusition and  sales mediator commission from the transaction monies..

Below is my calculation of LTCG.. Can you please correct me if something is wrong in below calculation?

  1. Cost of 4 Acre land in 2001 as per Fair market value by Government = 3,20,000
  2. Cost Inflation Index adjusted value of 4 acre land (3.17 multipled) = 10,14,400
  3. Sale price of 4 Acre land (April 2022)- (13,97,000*4) = 55,88,000
  4. Commission paid by seller to  sales mediator     = 1,00,000
  5. Amount lialbe for LTCG Tax (55,88,000 - 10,14,000 - 1,00,000 ) = 4474000
  6. 20.8%(20% tax+ 4% cess) tax on Amount liable (0.208*4474000) = 930592.0


However,my freinds CA is calculating LTCG on 55,88,000 with out any deductions.. Can you please weigh in your opinion here?
 

Replies (3)
Yours is not a rural agricultural land for tax purposes. accordingly whole transaction in taxable.

your working ia correct and it is definitely required and possible to deduct the indexed cost of acquisition and transfer expenses from the sales consideration.
Working is correct 👍👍
Your calculation is correct


CCI Pro

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