An assessee had purchased a house 10 years back at Rs 20 lakhs with an area of 1000 sq feet in a co-op housing society. The housing society was redeveloped and the assessee got a house of 2000 sq feet by paying 50 lakh rupees.
The assessee now intends to sell this house for 2 crores. The asset is taken as a long term capital asset and Rs 20 lakhs (after indexation) is taken as cost of aquisition and Rs 50 lakhs is taken as cost of improvement. The balance is offered to tax.
Is this treatment correct?
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