capital gains tax

691 views 5 replies

Neha

Article

118 Points Posted on 25 May 2010

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)

Rachit

Analyst

913 Points Posted on 25 May 2010

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

Guest

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

P-A-W-A-N

TAX - MANAGER AT GURGAON

541 Points Posted on 25 May 2010

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