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Computation of capital gain

dileep abasaheb pathade (articel's) (49 Points)

23 December 2013

I have problem about to computation of capital gain on sale of land.one of my client has sale his land in2008-09.the land is received by him from his father and his father is received that land by law (means under the scheme of kul kayada).before 1985. The land is agriculture land before sale means up to 2006-07.And land within 8km of Muncipal corporation.

My question are

1) The asset is capital asset or not.

2) If asset is capital asset what is the cost of asset is taken.

3)what is the year of acquisation.

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4 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 24 December 2013

It is a capital asset because the land is located within 8km of municipality.

The cost of acquisition shall be the market value of the land in the year in which the land was transferred to the father.

I am not sure about the Kul Kyada scheme, but you should be able to determine the market value of the land in the year your father became the owner.

Wait for more replies.

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CA Nitin K. Varshney (FCA DISA CCA Peer Reviewer (ICAI)) (606 Points)
Replied 24 December 2013

municipal limits vary for diffrent municipal areas. so first of all check the applicable municipal limit for your area. it may be possible that it will covered under agriculture land. year of acquisition will be the year in which your client received it from his father, which you did not mention in your query. cost of auquisition will be cost on 01/04/1981 if purchased before than this date or the purchase cost if purchased after 01/04/1981 as the case may be.

hope my reply will be helpful to you.

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dileep abasaheb pathade (articel's) (49 Points)
Replied 06 January 2014

TNX SIR I WANT MORE INFORMATION ABOUT COMPUTATION OF CAPITAL GAIN

neha abhishek (Auditor) (60 Points)
Replied 08 January 2014

Yes this true that every municipal limits vary for different municipal areas. So first of all check the applicable municipal limit for your area. It may be possible that it will covered under agriculture land.

The cost of acquisition of the asset shall be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the asset incurred or borne by the previous owner or the assessee, as the case may be, till the date of acquisition of the asset by the assessee.

Where the cost of acquisition is to be taken as the cost to the previous owner, the period of holding by the previous owner should also be considered.