Capital gain

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I have a query on Capital Gain:

 

‘A’ purchased for Rs. 37,50,000/- via an Agreement a property in Feb 2006 which was under construction at that time. The property was ready in 2009 and Occupancy Certificate was given in that year(2009). The Sale Deed was made in August 2011. And ‘A’ paid Rs. 300,000/- towards Stamp Duty & registration charges for same in 2011.

In March 2012, ‘A’ sold that property to ‘B’ for Rs. 39,00,000/- and Sale deed was executed accordingly.

‘B’ paid Rs. 2,00,000/- towards Stamp duty & Registration charges.

Now my Queries are:

1.       What is the Cost of Acquisition for ‘A’ When he sold that property to ‘B’?

2.       When does the transfer of that property takes place when ‘A’ purchased that property?

3.       What is the Capital Gain/Loss to ‘A’ ?

4.       What will be the Cost of Acquisition to ‘B’ when he sales that property?

 

please suggest.

Replies (1)

As the agreement for the property was made in 2006, the CG arising would be LTCG.  The stamp duty is paid in 2011, so the COA would be 40,50,000.

The LTCG would be as follows:

Sales Consideration    39,00,000

Less: Indexed COA       6396881

LTCL                                - 2496881

I think that the sale consideration is low.  If your case comes up for scrutiny, the I-T authorities would adopt teh stamp valuation & if the sale consideration is higher with regards to stamp valuation then the sale consideration adopted for stamp valuation purposes would be considered.  In that case you might be requried to pay LTCG.


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