Capital gain
subhash bajpai
(Querist) 10 July 2012
This query is : Resolved
Sir,I am a member of Housing Society and invested Rs. 1 lac in 1999 and Society was made for providing houses to its members as per the deed of society. Society had purchased a piece of land but due to some reasons could not constructed houses on that land. Now due of some govt. norms Society is selling its land and paying 25 lacs as compensation against land advance made by me. My question is whether receipt will be considered as Capital Gain or income from other sources?
pls help.
Saurabh Bajaj
(Expert) 11 July 2012
Since you are member of the society, you automatically become one of the co-owners of the property.
Thus, in my opinion, your gain will be considered as Long term capital gain. You can deduct the indexation value of Rs. 1 Lakh from the Rs. 25 Lakhs received. The balance will be your gain.