House property tax

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Pawan

Software engineer

21 Points Posted on 10 December 2015

Hi, I had a land which a builder took and in return he gave me 50% of the flat he constructed. There is no money exchange happened between us for the land. We have a contract which says I will get 12 flats out of 24 flats the builder will construct .The construction just finished this year (2015). Now what is happening is I want to sell one of the flat and I am not sure how to calculate capital gain as I have not bought this flat. Could you please let me know if I sell one of the flat now, how the tax will be computed on that. And what if I want to sell it after 3 years? Regards, Pawan.

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Venkatesh

Student CA Final

36 Points Posted on 10 December 2015

Hi Pawan,

1) In the year of jont development agreement capital gain will arise on sale of land for which full value of sale consideration(FV of SC) will be Fair market value(FMV) of flats which you receive on completion of construction.

2) on sale of flats again capital gain will attract in the year of sale (if you held the flats as capital asset).

3) income under Business if flats are held as stock in trade.

4) FV of SC considered in computation of capital gain in 1 above becomes the cost of flats.

5) For detailed explanation pls refer attached article