I bought a 200 cents land at a price of 40 lakhs during 2007-08, During 2016-17 I converted it into smaller plots for ease of sale. The guideline value per cent amounts to 100000. The saleable land after removing the common area and road comes to 150 cents. I sold 10 cents land for 15 lakhs during 2016-17. The CG Computation and PGBP computation in my view is as below. Please correct me if I am wrong.
Capital Gain
Full Value Consideration : 1,50,00,000 (150*100000)
Less : Indexed COA : 81,66,969 (40,00,000*1125/551)
LTCG : 68,33,031
LTCG attributable to sold plot : 4,55,535 (68,33,031*10/150)
Amount to be deposited in NHAI bonds for availing exemption = 4,55,535
Income From Business
Proceeds from sale of plot : 15,00,000
Cost of plot : 10,00,000 (1,00,000*10)
Income from business : 5,00,000
Total Income = 5,00,000
My doubts are
1.Whether Full Value Consideration is taken only for the saleable portion (150 cents or 200 cents)
2.Whether divison of plots into smaller plots for ease of sale be treated as conversion of capital asset into stock in trade ?
CAclubindia
