Capital gain : doubt

according to me the same should be treated as cost of improvement....

please wait for more replies.

IF THIS IS BEFORE 1/4/81 THEN COI IS IGNORED.IF IT IS AFTER 1/4/81 THEN IT IS INDEXED IN FOLLOWING MANNER

COI * CII OF YR OF TRANSFER /100

I think it will be coi

it will be treated as cost of improvement.........

i agree with archana das.....

Dear Devendra,

By looking at your problem it looks like, it is related to business (because Staff Quarter built).

For income tax purpose Land is separe asset (Depreciation is not available) and building is separate asset (Depreciation Available).

So, you have to calculate the cost accordingly.

Building is depreciable asset, hence STCG (CG should be calculated on block of Asset)

Land is LTCG (Cost can be taken is: Actual cost of market value on 01/04/1981 whichever is beneficial)

COI prior 1981 is nil.

no it shall be cost of building refer case CIT VS CR SUBRAMANIAN 

The Cost of improvement before 1/4/1981 is to be ignored. Hence the fair value of the land along with the building is to be taken as on 1/04/1981 if the same was contructed before the said date.

If however the staff quarter was made after 1/04/1981, it is to be treated as cost of improvement and indexed accordingly if it is for the purpose of sale.

IT WILL BE COST OF IMPROVEMENT ...

PRIOR 1981 VALUE WILL BE NILL.....

Respected professionals,

My thoughts is that 'Staff Quarters' will be treated as a seperate asset (both for accounting and IT purpose). Therefore, building will be depreciable asset taxable as STerm and Land as LTerm.

Cheers

It is better to treat as separate assets. If the building is used by a business then depreciation will be claimed and it will be a short term capital gain, that arises out of sale of building portion.

While selling the asset wholly, land and building, valuation is separately required.