Capital gain

This query is : Resolved

Saurabh Garg (Querist)
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12 March 2014 An Individual has purchased a plot on 15.04.2000.

Govt has paid the compensation for acquisition of the said plot on 19.07.2012.

Is the Long term capital gain applicable in case of compulsory acquisition of such land (not an agricultural land)

Whether Indexation to be done on both Acquisition cost & sales consideration.

Thanks in advance.

C.A. Mayur J. Raiyani

C.A. Mayur J. Raiyani (Expert)
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12 March 2014 there is Long term capital gain, indexation is done on cost of acquisition by individual and not on sale consideration.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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12 March 2014 In addition to CA Mayur's reply I would lie to point out that period of holding for the purpose of determining nature (long term or short term) & year of indexation the year in which the land was ACQUIRED shall be considered.

For eg. land acquired during FY 2009-10 & compensation paid in FY 2012-13

Then Cost Inflation Index (CII) will be taken for FY 2009-10 and NOT 2012-13.

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Saurabh Garg

Saurabh Garg (Querist)
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12 March 2014 Thanks Mayur Ji for your advice.
Thanks Mr. Siddartha, rightly said by you date of compensation is what i am considering.

One more thing i would like to share is that after indexed cost, Capital loss is resulting. Now Capital loss cannot be adjusted with the Business Profit then till whne it should be carried forward.

C.A. Mayur J. Raiyani

C.A. Mayur J. Raiyani (Expert)
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12 March 2014 it can be c/f for next 8 years