Capital gains on sale of land

313 views 2 replies
I have a residential plot purchased from authority in 2012 for 15 lacs but it is yet to be registered in my name. Also, the plot is vacant as no construction has been done. Now, I'm selling this plot 'as is' for 40 lacs wherein transfer expenses to authority and penalty for extending time for construction approx. 5 lacs has to be borne by myself. Now, basis our understanding there will be a long term capital gain of 10 lacs

Sale consideration. 40 lacs
less Purchase cost. indexed 25 lacs
less Transfer exp & penalty. 5 lacs
Capital gains. 10 lacs

Please suggest if this is right. Also, the sale consideration is less than the circle price so do we need to add back notional profit ie. difference by which circle price exceed sale consideration.
Replies (2)

1. Yes, seems correct.

2. Yes, to be added for CG calculation.

Sale value 40 lakhs
less: expense on transfer 5 lakhs
net consideration 35 lakhs
less: indexed cost of acquisition 15 lakh*280/200= 21 lakhs
Gain will be 14 lakhs ( provided sale made during fy 18-19)

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