Capital Gain

shashi's treatment was right we have to bifurcate capital gain into short and longterm gains

hi Shashi

You replied but you didn't said about basis of bifurcation. If in future Income Tax Officer will ask then we should have sufficient proof

Deeeeeearrrrrr allllllllllllllllllllllllllllllllll     !

I know the section 50 very well but but but

what will be the bifurcation of Sales Consideration amoung land & Building & what will be the basis , so that i can prove before ITO if question aris in future.

I am thinking to suggest to the Client to take VALUER help to find out the actual resell value of Land & Build. So that we can safe against ITO in future as CHARTERED ACCOUNTANTS.

Hey Bifurfication of Consideration between land and building should be made. On Sale if it is made it should be done at reasonable basis.

Since, Land is non - Depreciable Asset - LTCG

           Building is Depreciated hence,     -  STCG.

purchared a land from housing borad for Rs 2lakh & spent rs 528000 as per the following details:

on 01.10.99  Rs 87500

1.02.00   Rs 87500

on 01.11.00  rs 87500

on 1.03.01  rs 52000

on 01.08.01 rs 35000

on 01.04.01 rs 50000

on 01.05.01 rs 129200

further I sold this house on 01.07.09 for rs 1700000.00

buyer got it registered and paid stampduty on 2358000 as per prevailing circle rate.

i further paid rs 26000 towards water tax before transfer.

on recipt of rs 1700000    I repaid a housing loan of Rs 500000 taken in the name of my wife.

pl let us know the tax liability.

how it can  be saved?

good question...

well even my answer matches with Shashi.......So, the answer is correct given by Shashi...

Answer to question asked by Saurabh:

Take the Value as Sale Consideration on which stamp duty has been paid

Take the Indexation Cost on Land from the year in which it is purchased

also, take indexation cost separately of each and every payment spent for house from the year in which they are incurred respectively......

and balance figure take it as a Capital Gain if the balance is positive..

take Capital Loss if it is negative....

@ Ameet

Yes I agree with Shashi.....I havent noticed that depreciation was also charged....

i do replied how to allocate consideration b/w land and building. i am replying again.

Fair Market Value of Land can be easily known. because you can easily find out the rate of Land in that area.

you can not take a value less than the FMV bcoz ITO can demand valuer's certicicate then you will have to increase the full value of consideration.

Now deduct FMV of land from total consideration. Remaining will be the consideration of building.

It is my view. i think its right. but may be its not right.

varun is right

As the assessee is claiming depriciation on Building so sale of building shall result in STCG, while Sale of Land will be result in LTCG, 

Allocation of Sale considaration should be as per Municipal Value prevailing in that area at the time of sale.

yaa agree with poonam

Please refer the file.

while computing the business income, Profit on sale of asset will be ignored

if you have any doubts , please reply back