I purchased land in 2006 for 6 lacs. In 2019 I collobrated with a builder to construct. The builder agreed to built on it and give me one floor plus chq of 7.50 lacs. We registered an Agreement to sell for 35 lacs,out of which he paid me chq 7.50 lacs and balance 27,50 will be given as kind(one floor).He deducted 1 pct tds on 35 lacs and paid be balance as 7.15. Question 1:Is long terms capital gains tax is applicable? If so then how much .
Yes capital gain tax would be liable and sale consideration would be FMV of the flat he will give you and amount paid in cash/ cheque.
Cost would be cost of part of land the builder would get in exchange.
Capital gain will be paid in the year in which you get the possession of the flat.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
Hello,
Capital Gain(LTCG) would become chargeable to income-tax as income of the previous year in which the certificate of completion for the whole or part of the project is issued by the competent authority; and the stamp duty value, on the date of issue of the said certificate, as increased by the consideration received in cash(Rs. 7.5 Lakhs in your case), if any, shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset. The cost of acquisition would be the cost of the land to the landowner.
I hope that this answer satisfies your requirements. For further understanding, you can contact us directly or take a phone consultation.
Regards,
CA Hunny Badlani
- Will be applicable on actual sale of the flat by you in future.
- You should disclose this transaction in the ITR under schedule CG.
Hi,
1. Yes, LTCG is applicable.
It would be calculated as below: Sales consideration- Indexed cost of acquisition
Sales consideration=FMV of the flat plus amount paid in cash/ cheque.
Indexes COA=Cost of land to the landowner x cost inflation index of the year of transfer/cost inflation index of the year of acquisition.
Hi
Yes, it would be LTCG.
The FMV of your share of flats plus cash consideration shall be considered as total sales consideration. Cost of acquisition shall be your indexed cost of land purchased in 2006.
The capital gains shall be taxable in the year of completion of construction.
