Long term capital gain for gifted property

Dear Sir,

-As the date of acquisition falls prior to 1 April 2001, you have a choice to consider the Fair Market Value (FMV) of the property as on 1 April 2001 as your acquisition cost. 

So, firstly you need to get the valuation report of property as on 01.04.2001.

-These expenses are deductible from the total sale price:

a. Brokerage or commission paid for securing a purchaser

b. Cost of stamp papers

c. Travelling expenses in connection with the transfer – these may be incurred after the transfer has been affected.

Since you have received land by way of Gift you need to get its valuation done by government approved valuer for 01.04.2001.

First you need to calculate capital gain from sale of development rights.

You can claim expenses incurred with regard to such transfer.

You can claim loan expense if it was earlier not claimed as expense and also commission if you can prove a direct nexus of commission with such capital gain.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

- For land, indexation will be applicable from 01.04.2001. You need to obtain valuation report from the govt. approved registered valuer for FMV. In case of construction, indexation will be available from the year in which cost was incurred. 

- Interest on loan will be available if deduction was not availed in other sections of the Income tax Act. Commission may be allowed.

Hi,

1. You need to consider the FMV or stamp duty value of the land as on 1.4.2001 and index it with 2001 indexation (i.e. 100)

2. Not loan, but construction amount can be taken as expenses and you can index it with construction period date.

3. Commission can also be taken as expenses.

Hello,

1. You need to get the valuation report of the property as on 1st April 2001. And index the value from 2001.

2. The commission would be allowed as expenses incurred in connection with the property. Construction cost would be allowed as expenses with indexation benefits. Loan amount won't be allowed while interest cost might be available.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Cost inflation index is available for the year in which the original owner took the asset ie 1973.  YOu may consider the fair value of the asset as on 2001 for indexation.  Interest may be treated as cost of construction of house.  Commission paid for sale or purchase of house can be considered.  Kindly note that the proof of payment of commission and interest is must.  Loan cannot be treated as expenses, interest can be.