• Sale of house property

I Purchased Land for 56,000/- in year 2000, constructed house on it for 11,50,000/- (construction made in cash) in year 2002 and now am selling the house property in FY 20-21 for 60,00,000/-.
Questions -
1. Do I need to calculate Capital gains for Land and House Property separately? If not separately, then do I need to take construction costs as cost of improvement?
2. What documents do I need to get to satisfy the AO if I don't have the proof of construction costs which I incurred back in 2002?
Asked 3 months ago in Capital Gains Tax

Land and House property cost clubbed together, will be taken as costs of costs and further cost incurred be will be taken as costs of improvement. 

Deed, supportiing costs invoice will be required to satisfy AO. 

Vidya Jain
CA, Kolkata
927 Answers
35 Consultations

4.8 on 5.0

It depends on the sale deed and other details.


Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement. You can even book phone consultation for further personal assistance.

Thank you.

Naman Maloo
CA, Jaipur
3751 Answers
43 Consultations

5.0 on 5.0

To calculate cost of residential house have to first calculate  land  cost , FMV as on 01.0402991 or actual cost whichever is high  then get it index cost for FY 20-21  then calculate  building index cost for  FY 20-21  but have to explain all the construction exp with valid proof. CII will applicable

Nitin Jain
CA, Jaipur
215 Answers

4.7 on 5.0

Dear Sir,

Reply to your questions are:

1. No. you can calculate the Capital Gain for complete property together. You have to take Land Purchase Cost as Cost of Acquisition and Construction Cost as Cost of Improvement/ Construction.


Here is the Calculation of Capital Gain


Sale Consideration= 60,00,000

COA                      =  1,68,560


COI                       =  32,96,666



Capital Gain        = 25,34,774


2. You have to prove the source of income out of which you have spent the amount on construction.
You can show ITR's (Income Tax Returns) of the years pervious to year 2002 to substantiate the source of your income.


Thanks and Regards 

Divya Chugh

Divya Chugh
CA, Noida
187 Answers
1 Consultation

5.0 on 5.0

You can get the property valued in the year of completion of construction and then calculate capital gain. 

If the property is valued then bills will not be required.

Ruchi Goel Anchal
CA, Gurgaon
418 Answers
4 Consultations

5.0 on 5.0



1. No .

Calculation of long term capital gains is sales consideration less cost of transfer less indexed cost of acquisition less indexed cost of improvement. It will be form part of cost of improvement.

2. You can get valuation from registered valuer

Karishma Chhajer
CA, Jodhpur
2341 Answers
15 Consultations

5.0 on 5.0

Ask a Chartered Accountant

Get tax answers from top-rated CAs in 1 hour. It's quick, easy, and anonymous!
  Ask a CA