Capital gains on reconstruction of house

This query is : Resolved

Sriram (Querist)
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15 June 2013 Hi,

I brought a land and constructed a house on the same during 1994-95. During 2011-12 I demolished the house and constructed a new house there.
Now that I'm planning to sell this house.

1. whether the capital gain is short term or long term?

2. Can I compute my CG separately for the land and house to avail indexation benefit for land?

3. Can I add the cost of demolition of the old house to Cost of the new house that is built?

CA Kapil Verma

CA Kapil Verma (Expert)
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15 June 2013 1. its long term Capital gain

2. No you can not separate land and building

3. yes, you can add cost of demolition to it.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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15 June 2013 1. Land long term asset. Building short term asset.

2. CG for land and building should be calculated separately. Please refer CIT Vs Dr. Ramachandra Rao (1999) 236 ITR 51 (Mad).

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Sriram

Sriram (Querist)
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26 February 2014 Can I take the cost of original building's cost of construction or is it restricted to cost of new building plus demolition charges?

Sriram

Sriram (Querist)
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26 February 2014 Can I take the cost of original building's cost of construction or is it restricted to cost of new building plus demolition charges?