capital gains tax

591 views 5 replies

hi frnds....

if I purchase a land today for Rs. 10,00,000/- and after a year, I construct a building on it costing Rs. 15,00,000/-. Now, I sale it after 3 years from today...at the time of sale land is valued at Rs. 15,00,000/- & Construction on it Rs. 20,00,000/-. This Land & Building hasn't been used for business purpose. Let me know exact treatment of capital gains in this case...specially whether cost of construction will be indexed or not & whether there will be short term capital gain on building in this case??

 

Regards

Neha

Replies (5)

In my view since the building has been sold before 3 years from the date of construction capital gain on building would be considered as STCG.

Land on the other hand has been sold after 3-years, hence it will be treated as LTCG on which indexation benefit can be claimed

there must be separate treatment of land and buliding as the land is a LTCA and buliding is a STCA.u have to be calculated both gains taking coa of independent assests.

regards

tarun rustagi 

Originally posted by : tarun rustagi

there must be separate treatment of land and buliding as the land is a LTCA and buliding is a STCA.u have to be calculated both gains taking coa of independent assests.

regards

tarun rustagi 

 Yes is Right

there decision of Rajsthan HC, in this case.

Thre vil b seprate treatment

Saperate treatment...!!!! when the building is being consturcted why should one go for the diffrent agreement to sale the same when tax benefit of long term capital gain with indexation is available.

Mr. Amit can u please forward me the Rajasthan HC case...


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register