Sir,
my father have bought a land in laxmi park, nangloi delhi in 2002 for 2.5 lacs and now he want to sell it for 28 lacs because we have booked a flat in gurgaon. As, laxmi park, nangloi is an unregulated area what kind of taxes we have to pay or is it legal to sell/buy a land in unregulated areas.
Thank you
You would need to compute long term capital gain using method below.
Purchase Year = 2002-03, Purchase Cost = 250000, Cost Inflation Index (CII) for purchase year = 447
Sale Year = 2011-12, Selling price = 2800000, CII for sale year = 785
Indexed Purchase price = 250000 x (785/447) = 439038
Long term capital gain = 2800000 - 439038 = 2360962
Income tax on capital gain = 2360962 x 20% = 472192.4
This is assuming that sale price and buying price are same on paper (registry and stamp duty has been paid accordingly). If ongoing circle rate is more than actual selling price, the circle rate would be needed to compute long term gains.
If registration of sale/purchase has not been done, legally property ownership is not established. In that case too, long term capital gains would be computed and paid similarly.
