• Capital Gains on Plot of Land

I have a plot of land which was bought for 18 Lakhs in 2009 which I plan to sub-divide into 3 equal plots each of which will fetch around 15 Lakhs at today's price. 

I am planning to sell 2 of these plots and construct a house on the remaining one plot with the money i get. So if sell two of these plots i will get around 30 Lakhs.

So in this scenario how do i calculate capital gains  without considering indexation
1. a.  30 Lakhs - 18 Lakhs = 12 Lakhs or
    b.  30 Lakhs - 12 Lakhs ( 2/3 of 18 Lakhs as i am selling 2/3 of the plot) = 18 Lakhs

2. If I  construct a house ( my first house though i have a few other plots of land )  which will cost me  around15L constructions, will I be able to fully offset capital gains against my house construction charges in the case of 1a and in the case 1b. would i be liable to pay only for 3Lakhs ( 18L-15L)?

3. If i am only able sell one subdivide plot now and second sub-divided plot by next fiscal year how will the computation of capital tax be affected?
Asked 3 years ago in Capital Gains Tax from Trivandrum, Kerala
1. In the present case you need to consider indexation by taking b point.

2.In the second question you can invest in construction and claim capital gains benefit.

3. In the third question you can sell one and invest in construction to get capital gain benefit. The other plot you are planning to sell next year , the capital gain benefit can be availed.
Shyam Sunder Modani
CA, Hyderabad
1408 Answers
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