Computation of indexed cost of a plot of land

If the asset is acquired before Apr81 then the fair value of the land on or after Apr81 or the cost of the asset before Apr81 should be considered as the Cost of Acquisiton.

Once this cost is being determined then the same indexed by multiplying it with th index for F.Y. 20120-13 & dividing it by 100.  Then this indexed cost shall be deducted from the sale consideration of land and the balance amount would be a LTCG.

Assuming that the FMV(as determined by the valuation report) is greater than the actual cost of land:

1) without indexation-

503,000X 267.27

                  590.69

2) WITH INDEXATION:

503,000X 267.27 X 852

                  590.69    100

In my view, considering that the whole plot was valued on a uniform basis i.e. that the plot sold had the same benefits attached to it as was with the part that is still in possession, the cost of acquisition of the plot sold can be taken proportionately.

Hence cost of plot sold will be Rs 227593 on 01.04.1981

On the basis of above conclusion, its indexed cost will be Rs 1939092 (227593/100*852)

Long term capital gain = 9096908