Capital gain confusion

An Assessee bought a plot in August 2001 for 3Lacs

Sold half of it in August 2011 for 15Lacs

Invested 15Lacs on construction of new house on the other half plot

Sold the other half plot+constructed part for 20L in August 2013

What will be tax impact in AY 2012-13 and AY 2014-15

Replies (4)

1. Indexed cost of half of the plot of land will be 1.5 lacs × 785 ÷ 426 = 276408.(Assumind plot of land was divided exactly half)

CG for AY 2012-13 will be 15 lacs - 276408 = 1223592 (Presuming claimed exemption under 54F by fulfilling all the conditions of it. Hence entire CG exempt then. However, if not claimed any exemption at that time, CG will be LTCG and will be taxed @ 20% of CG)

2. Now coming to AY 2014-15, individual valuations of plot of land and house property is required. If it was a joint sale deed and not separated then get separate valuations done by asking the Registrar, value of the land and house at the time of sale. Individual valuations are necessary to ascertain the CG individually.

Now the indexed cost of land will be 1.5 lacs × 939 ÷ 426 = 330634 and cost of house will be 15 lacs. (since entire amt was invested in construction of house as mentioned in your statement. If not then exemption calculations done previously will change accordingly) Indexation will not be applied to house as it is a short term CG since it is sold within 3 years of purchase. 

After getting individual valuations on the date of sale., CG will be Sale - Indexed cost / Cost as the case may be.

Important to note that if exemption u/s 54F is claimed earlier then entire entire exemption would be disallowed now and the same will be taxed as LTCG now. i.e. CG of AY 2012-13 of 1223592 will entirely be taxed as LTCG.

House will be taxed as STCG and Plot of land sold in AY 2014-15 will be taxed as LTCG.

 

Can't he claim the investment on construction now against the disallowed 54F gain

No he cannot avail the exemption back because it is clearly stated in sec 54F for not purchasing or constructing the house within period of 1 year/3 years as the case may be for purchase or sale from transfer of original asset

So assessed has no option other than to pay tax on amount disallowed

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
24 October 2026
CA Industrial Trainee

Fytomax Nutrition Private Limited

Aurangabad

CA Inter

View Details
Company
08 October 2026
Account Executive

Elite Taxation

New Delhi

CA Foundation

View Details
Company
30 September 2026
Senior Accounts Executive

Codeboard Technology

Chennai

MBA

View Details
Company
15 October 2026
Senior Accountant

Continental Belting Pvt Ltd

Mumbai

B.Com

View Details
Company
21 October 2026
CA INTER/ BCOM WITH EXPERIENCE

CA S KUMAR GUPTA & CO

Amritsar

CA Inter

View Details
Company
10 October 2026
Accounts Associate Level 1

Abic and Mani Chartered Accountants

Kottayam

B.Com

View Details
Company
ARTICLESHIP 01 October 2026
Articled Assistant

KPSN & Associates LLP

Chennai

CA Inter

View Details
Company
ARTICLESHIP 28 September 2026
Junior Accountant

J S P M & Associates LLP

Pune

B.Com

View Details