Long term capital gain and provisions to minimize the tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 March 2017
We, I (myself & my two sisters) have inherited a 10.00 bigha plot of a land from my father during the year 1985, which was purchased by my father for Rs. 1,000/-per bigha only long ago.
Total cost by father 10,000

We had to incur various expenses like earth filling, road construction etc. etc. on each
plot @ Rs. 50,000/- per plot.
Total Expenditure 500,000

Now the said land is converted in 10 nos.plot of 1.00 bigha each and is going to be
sold to various persons @ Rs.2.00 lac per bigha each.
Total sale price 2,000,000

Hence, Sale proceed 2,000,000
Less: Cost & Expenses 510,000

Long Term Capital Gain 1,490,000

Sir, whether the above calculation is correct ? If correct, what are the various provisions to minimize the tax on LTCG ?

CA Shubhanshu Jain

CA Shubhanshu Jain (Expert)
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16 March 2017 Above calculation is not correct. for actual calculation you have to tell me when your plot was purchased and dates on which expenditures of Rs. 500000 were incurred

Querist : Anonymous

Querist : Anonymous (Querist)

16 March 2017 The plot was purchased during the year 2005. And the expenditures have been incurred during financial year 2015-16 on various dates.

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CA Shubhanshu Jain

CA Shubhanshu Jain (Expert)
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16 March 2017 but you have mentioned that you have inherited the plot in 1985 and that was purchased lon back

Querist : Anonymous

Querist : Anonymous (Querist)

16 March 2017 Sorry, the plot was purchased by my father during the year 1955.

Expert : Anonymous

Expert : Anonymous (Expert)

16 March 2017 you need provide details of year of purchase and other expenditure and apply indexation and then compute LTCG

Expert : Anonymous

Expert : Anonymous (Expert)

16 March 2017 To minimse refer section 54EC or section 54G

CA Shubhanshu Jain

CA Shubhanshu Jain (Expert)
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17 March 2017 For Calculation of capital gains you have to mention following details also.

- Year of sale
- Dates on which expenditure of Rs. 500000 was incurred

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