How to compute capital gain on sale/transfer of Land and Buildings?
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Computation of Capital Gain ➤ A. For Long-Term Capital Gain (LTCG) As per Section 48 (mode of computation): LTCG = Full Value of Consideration (FVC) – (Indexed Cost of Acquisition + Indexed Cost of Improvement + Expenses on Transfer) Indexed Cost of Acquisition (ICOA) == Original cost × (CII of yearRead more
Computation of Capital Gain
➤ A. For Long-Term Capital Gain (LTCG)
As per Section 48 (mode of computation):
Indexed Cost of Acquisition (ICOA) =
= Original cost × (CII of year of sale ÷ CII of year of purchase)
CII (Cost Inflation Index) is notified annually under Rule 48.
📌 Note: If property is inherited, cost to the previous owner is considered.
Tax Rate:
20% with indexation under Section 112
Surcharge + cess applicable
➤ B. For Short-Term Capital Gain (STCG)
Tax Rate:
As per normal slab rates applicable to the assessee.
📦 3. Deductions from Capital Gains (Expenses on Transfer)
Brokerage/commission
Stamp duty/registration
Legal fees
Advertising cost for sale
💡 4. Exemptions (Optional)
You may claim capital gain exemption under following sections if reinvested:
​Yes, under the Indian Income Tax Act, certain insurance claim receipts are treated as capital gains and are taxable accordingly. Here's a detailed breakdown: Taxability of Insurance Claims under Section 45(1A) Section 45(1A) of the Income Tax Act, 1961, addresses the tax implications of insurance cRead more
​Yes, under the Indian Income Tax Act, certain insurance claim receipts are treated as capital gains and are taxable accordingly. Here’s a detailed breakdown:
Taxability of Insurance Claims under Section 45(1A)
Section 45(1A) of the Income Tax Act, 1961, addresses the tax implications of insurance compensation received due to the damage or destruction of a capital asset. This section was introduced to tax such receipts as capital gains, even though there’s no actual transfer of the asset.
✅ Applicability Conditions:
The insurance compensation is received due to the damage or destruction of a capital asset (e.g., building, machinery, land).​
The cause of damage or destruction is one of the following:​
Natural calamities (e.g., flood, cyclone, earthquake)
Riot or civil disturbance​
Accidental fire or explosion
Action by an enemy or measures taken to combat such action​
If both conditions are met, the insurance compensation is deemed as consideration received for the transfer of the asset, and capital gains tax is applicable. ​
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