How to calculate capital gains on selling a self built building

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I am planning to sell a flat in the next month for 40 lakhs. This house having 3 floors was built in year 2002 on a plot purchased at 2 lakhs. The approximate cost to build a house was about 10 Lakhs, however I don't have any receipts for the same. But 1 floor was sold in 2004 for 4 lakhs for which i have the documents available.

I would appreciate your help on clearing following points How do I calculate the indexed value of this house? Can i use the 4 lakhs of 2004 as the basis for indexing? Or While mentioning the acquisition cost on IT form, do I have to provide the receipts to justify the cost of building the house? How do I show my capital gain in IT return? I am planning to buy NHAI bonds worth [selling price (40 L) - indexed cost (12L)] to save capital gains tax, would that be a suitable way to proceed?

Thanks

-Chinmaya

Replies (2)

Long term capital gains on the sale of a house can be calculated as follows:

Particulars Amount in Rupees
Sale price of the house XXXXXX
Less: Any transfer expenses such as brokerage, commission etc XXXXXX
Net Sale Consideration XXXXXX
Less: Indexed acquisition cost of the house XXXXXX
Less: Indexed house improvement costs XXXXXX
Gross Long Term Capital Gain XXXXXX
Less: Any exemptions available under sections 54, 54B, 54D, 54EC, 54ED, 54F, 54G XXXXXX
Net Long Term Capital Gain XXXXXX

Hi Rama,

Thank you so much for taking out the time to reply, it's really helpful!
I have still one doubt mainly in regards to coming up with Improvement costs, I don't have the receipts for it, but i did sell one of the floors out of 3 at 4 lakhs in the next year(2004) the house was built(2003). So can i use that as basis for getting 4 lakhs as Acquisition Cost + House Improvement per floor and then index on 4L i.e 4*(317/105) to get the indexed value? Or would there be some other approach i would have to take to get the valuation of floor?
 

Thanks in Advance

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