Pls Answer My Query.
Mr X sold a Residential Property in June 2012. The Capital gain on it is Rs 60 lacs.
He Purchased Another Property in July 2012 for 60 lacs.
He then demolished the property newly purchased.
Then he sold the Ground Floor in small pieces to different shopkeepers to build their shops.
1st & 2nd Floor which will be constructed of which the 2nd floor will be used for residence & 1st Floor will be let out to a commercial bank.
Query 1.
What should be the treatment in capital Gain.?
Query 2.
since 60 lacs is cost of new property, assuming 20 lacs is cost of each floor.
Now 2nd floor cost is 20 lacs, so we would get exemption of 20 lacs from capital gain.
Now sale proceeds of ground floor are 40 lacs. And the cost of construction on 2nd floor which is residential comes to be 40 lacs.
So would we get exemption of whole 60 Lacs or not?
Query 3
Moreover, what would be the tax treatment for the newly residential property purchased and ground floor sold in different pieces.
Kindly Advise.
CAclubindia
