LTCG on lawful acquisition of residential plot by government


I purchased a piece of land in 2002 at at price of Rs. 31625.00. For development of a ring road Govt. of AP acquired it and paid me Rs.380000.00 on September 15, 2011.

Kindly tell what is the amount of LTCG. And also let me know how to save tax on LTCG.


KV Satya Murty Bhopal

asked Sep 27 '11 at 15:23 by SATYAMURTY 111

Calculation for long term gains is provided below:

Purchase Year = 2002-03
Purchase Cost = 31625
Cost Inflation Index (CII) for purchase year = 447

Sale Year = 2011-12
Selling price = 380000
CII for sale year = 785

Indexed Purchase price = 31625 x (785/447) = 55538
Long term capital gain = 380000 - 55538 = 324462
Income tax on capital gain = 324462 x 20% = 64892.4

You can save this tax fully by investing whole sale consideration amount into a new residential house property (u/s 54F) or by investing into capital gain bonds (u/s 54EC).

answered Sep 27 '11 at 15:50 by Pankaj Batra 5.2k320


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Asked: Sep 27 '11 at 15:23

Seen: 1,633 times

Last updated: Sep 27 '11 at 15:50