capital gain

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akash (Querist)
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23 December 2008 If i m having a house and i demolish the whole superstructure and reconstruct the same from scratch. Whether the reconstruction cost shall be cost of improvement.

Or the new superstructure shall be a new capital asset and period of holding of three years to calculate long term capital gain on this new superstructure shall be calculated from the date of compeletion of new house.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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23 December 2008 Second para of the question is the answer.

CA Parvin Ahuja

CA Parvin Ahuja (Expert)
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23 December 2008 The cost of contruction of the house will be added to the cost of asset and will not be treated as new asset.

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CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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23 December 2008 In my opinion, new house will be a new capital assets.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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23 December 2008 New capital asset.

CA Parvin Ahuja

CA Parvin Ahuja (Expert)
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23 December 2008 Whenever the house will be sold there would be two inflation index one for the land and the other for the building.

C A GROUP COACHING

C A GROUP COACHING (Expert)
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23 December 2008 YOU HAVE THE ANSWER IN YOUR QUESTION.
IF IT IS RECONSTRUCTED ON THE SAME LAND IT NEED NOT BE TAKEN AS NEW ASSET BUT ADD THE COST OF RECONSTRUCTION TO REPAIRS & CONSIDER IT AS VALUE ADDITION TO OLD COST OF THE ASSET.
WHEN SOLD C I I WILL BE CALCULATED AS PER ORIGINAL VALUE & CII ON ADDITION AS PER THE CII OF THAT RESPECTIVE YEAR