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Property sell consideration is less than indexed acquisition cost. Is it capital loss?

Tax queries 943 views 4 replies

Hello,
My friend purchased a house in May 2011 for 21,00,000 INR.
He sold the house in June 2023 for 30,00,000 INR.

Cost Inflation Index in May 2011 = 184
Cost Inflation Index in June 2023 = 348

Indexed cost of acquisition = 21,00,000 x (348/184) = 39,71,730

Sell consideration - Indexed cost of acquisition
= 30,00,000 - 39,71,730
= - 9,71,730

Does this mean he can book a capital loss of 9,71,730 INR and can offset it against capital gain?

Thanks in advance for your inputs.

Replies (4)

Your assumptions are correct...

Long term capital loss can be set-off only against Long term capital gains

The cause of the confusion was previously someone told me that it is considered a loss only if sell consideration is less than original cost of acquisition (NOT indexed cost of acquisition). 

Thank you Mr. Dhirajlal for clearing out my confusion.

You are welcome.  


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