Long term capital gain tax

Hi

 

Can some one provide more information.

I brought residential plot for 4 lakhs in 2003 and sold it 36 Lakhs in march 2010. On sale deed it was mentioned that 6 lakhs will be paid in June 2010 by cheque and number was placed on sale deed. Cheque never got encashed because buyer did not have money.

My question

1) for long term capital gain tax should I exclude 6 lakhs because I never got paid.

2) I spend lot of money on development like fencing, security and muncipal fees. I don't have recepits for fencing and other costs incurred in security  fee. Can I include these things in cost incurred for development form capital gain tax even though I don't have reciepts?

Please let me know.

Replies (9)

The Chq bounced or u never encashed it.......
 

He said there is no money so cheque not encashed ( i have not sent cheque for clearing)

While calculating capital gains we have to consider the sale consideration which has mentioned in the Sale deed , Subject to the conditions of Section. 50C,

In your case even though you have not received that 6 lakhs physically your sale consideration shall be taken as 36 lakhs only . 

If you have incured any cost towards that asset and if that cost  will increase the life of the asset then it will be treated as cost of Improvement and you can claim deduction towards the cost of improvement .

Hi,

Thanks for the same.

Do we have to produce receipts for improvements like compound wall, security fees etc......

I don't have many receipts so can I claim?

hello basu ,

 

In your case Full Value of consideration will be money received or receivable i.e 36 lac ( assuming SDV < sale consideration .i.e 50c not applicable)

and whether 6 lacs received or not you have to take the whole amount receivable as FVC fo calculating capital gains ( as per section 48).

 

and you can take the cost of compound wall incurred by you as cost of improvement (indexed)

for mucipal taxes - no deduction allowed under head capital gains and in my opinion security fees paid by you also not allowed but in case am wrong please revert.

 

hope it will help you

 

thanks

Dear Basu, If the case is selected for scrutiny, you will be required to produce receipts for Costs of Improvements claimed by you in ITR, So if you don't have the receipts don't claim it.

Dear Basu,

I agree with Sanjay. And also you need to fill the AIR column in the ITR as the sale consideration is more than Rs.30Lacs.

Dear Friends

 

Thanks for update

welcome dear :)

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