24 March 2015
Hi..all.
I hv a question...?
Mr. A has a open plot of land. Mr. B is a builder and he constructs bldg of 8 floors on that land and gives 1st 2 floors to Mr. A for free and sells remaining floors to outsiders.
What are the implications of Capital Gains in the hands of Mr. A ?
Take the land value 17000/- purchased in 1981 and builder came in 1991 and the market value per floor is 50lakhs at that time.
Points to think?
Mr. A is still the owner of plot.
What is transferred is.. the development rights
24 March 2015
Mr. A got 2 floors, market value is 1 crore. If A is still owner of the plot then there is no sale hence no capital gain will arise. Entire value is taxable. Normally 6/8 of the land will be transferred for 2 floors of market value 1 crore. In this case capital gain can be calculated and exemption can be claimed u/s 54F if eligible.
CAclubindia
