Capital Gain

 Hi,

Mr. A owns a piece of land.

Mr B (a builder) approaches Mr A.

Mr B and Mr A enters into an agreement where by Mr B will construct three floors on the land owned by Mr. A.

Mr B will bear all the cost of construction and will also pay a sum say Rs 10 Lacs as consideration to Mr A and in turn Mr A will give him one floor.

Query :

1) What will be the treatment of Rs 10,00,000 given as advance?

2)Mr B sells the floor given to him by Mr A. Since the property was owned by Mr A the consideration will be taxable in the hands of Mr A. What will be it's treatment??

3) If Mr A also sells a single floor, how will the Cost of acquisition be calculated?

 

Replies (5)

Dear Tushar,

UR QUERY IS SOMEWHAT SIMILAR TO THE ONE WE ALREADY DISCUUSED, PLZ CLICK ON THE BELOW:-

/forum/message_display.asp?group_id=62791

 

 Hi Amir,

Why will we consider the FMV of the Flat?

How will be the treatment of Capital Gain on Land and Flat??

Hi Tushar,

Suppose U have exchanged a "Land" for "Gold", Now this Capital Gain will be computed on transfer of this Land....

What would be the sale price...Sale price means the consideration...what is the consideration in this case..."Gold", therefore FMV of gold would be sale price...

That means in cases of exchange "it's "Assets givenup/transferred V/s Assets Acquired"

Now coming back to ur example

Now u tell me how the sale price of  3/4 of Land will be computed based on the principle above mentioned...

 

I hope now it is clear to u........

Yes, got it.

Let m also know what will be the treatment of capital gain on land and one floor of the building sold. Since capital gain on land will be long term and on flat will be short term. how will we bifurcate the consideration??

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