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Computation of Capital Gains on sale of Flats

srinivas (humble devotee of saraswati) (885 Points)

05 November 2008

Mr.X being the owner of land has entered into a Joint Development Agreement in oct.2007. His share in the developed property is 8 units. He has purchased the property in 2004 May. He wants to retain 2 units and sell the remaining 6 units.

What is the date to be taken for calculation of capital gains?

whether it is a short term or long term capital gain If Mr. X sells his property now(NOV.2008)?

Whether the date of the joint development agreement or date of registration of flats to be taken for the purpose of computation of capital gains?

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7 Replies

DINESH PATEL (FINANCE &ACCOUNT MANAGER - CA FINAL STUDENT) (657 Points)
Replied 06 November 2008

first of all there are two separate issue for calculation of capital gain , first the land is an independant and identifiable capital assets so loag term capital gain is calculated on trf. of land on the date of joint agreement on oct'2007.there is case of calcutta bench of tribunal in the case of CIT vs. Sri Sekher Gupata take the same view. The same view is also taken by the Rajasthan high court in CIT vs. Vimal Chand Golecha (1993)201 ITR 442.

if Mr.X sell the property now, short term capital gain should be charged.

Date of joint development agreement is taken for calculation of capitalgain on sell of unit

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srinivas (humble devotee of saraswati) (885 Points)
Replied 07 November 2008

What portion of land is taxable in the hands of the owner and the builder?

DINESH PATEL (FINANCE &ACCOUNT MANAGER - CA FINAL STUDENT) (657 Points)
Replied 07 November 2008

its all depend on condtion/details of joint agreements.

(Guest)

I had purchased a flat in 2000 and then sold in 2007. I purchased another flat in 2007 with the realised amount and claimed exemption from Capital Gain. I want to again sell the flat this year.

1. I would like to know since this would be short term capital gain, can i claim exemption u/s 54?

2. If i can claim exemption, then it is necesary for me to invest in residential property again or can i invest else also?

Regards

Amihi

(Guest)

Originally posted by :srinivas
"	Mr.X being the owner of land has entered into a Joint Development Agreement in oct.2007. His share in the developed property is 8 units. He has purchased the property in 2004 May. He wants to retain 2 units and sell the remaining 6 units. What is the date to be taken for calculation of capital gains? whether it is a short term or long term capital gain If Mr. X sells his property now(NOV.2008)? Whether the date of the joint development agreement or date of registration of flats to be taken for the purpose of computation of capital gains?	"

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(Guest)

Originally posted by :srinivas
"	Mr.X being the owner of land has entered into a Joint Development Agreement in oct.2007. His share in the developed property is 8 units. He has purchased the property in 2004 May. He wants to retain 2 units and sell the remaining 6 units. What is the date to be taken for calculation of capital gains? whether it is a short term or long term capital gain If Mr. X sells his property now(NOV.2008)? Whether the date of the joint development agreement or date of registration of flats to be taken for the purpose of computation of capital gains?	"

T.S.Mohana Harish (Audit Assistant) (163 Points)
Replied 02 December 2008

no u canot claim exemtion u/s 54 because u have claimed exemtion earlier is u sell with in i year the entire amount u have claimed u/s 54 will be taxable.

T.S.Mohana harish , harish_ts1984 @ yahoo.com