pradnya (proprietor) (91 Points)
12 January 2010dear all
i have purchased land in 1996 for 3 lakh
and constructed a building in 2009 for 150 lakh
and wanted to sell the land + building for 250 lakhs
current market rate for land in that place is around 50 lakhs
pl guide me for following
what will be the long term capital gain part
and what will be the short term capital gain part
whether i need to sell the land and structure separately ( i.e. with two separate agreements )
how to invest the same to save the tax?
tnx
pradnya
Amir
(Learner)
(4016 Points)
Replied 12 January 2010
Dear Pradnya,
U don't have to sell it in a different agreement but for practical convinence it would be great if u can make 2 different agreements for land & for building.
For the purposes of capital gain u have to segrregate the total sale price in two parts..
1) First belonging to Land since it is a LTCA, U can save tax by investing u/s 54EC(i:ein govt. notified bonds) &/or 54F(buying a new house)
2) Second belonging to Structure since it is a STCA, No scheme for tax saving is available...
C.Balaji
(Learner)
(1867 Points)
Replied 13 January 2010
S completely agree with Amir..
Land and Building can be treated separately.....Land - LTCA .... Building - STCA....
Land - 54 EC and 54 F to save tax....
Building - STCA no chance for tax saving....
Deepak Kumar Mohata
(Student)
(37 Points)
Replied 13 January 2010
Hi frnds..
is it not possible to treat the building as an addition / improvement to the land...
Accordingly, the full gains will be long term capital gains computed as under-
a)Full Value of Consideration 250 lacs
b)Less: Indexed Cost of Acquisition (Indexed value of 3 lacs)
c)Less: Indexed Cost of addition/improvement 150 lacs
Long Term Capital Gains (a-b-c)
C.Balaji
(Learner)
(1867 Points)
Replied 13 January 2010
Mr.Deepak Kumar
i think building constructed on Land cannot be treated as Improvement / addition....
CAclubindia
