ANAND KUMAR (ADVOCATE) 25 March 2011
A person had purchased a shop(building) at Rs. 6,00,000.00 on March'2009. ( Valuation according to State Stamp Valuation Authority was Rs. 10,10,560.00). The same property was sold after 3 months at Rs. 8,00,000.00 ( Valuation according to State Stamp Valuation Authority was Rs. 14,56,000.00). Now my question is what will be the STCG. Assuming there is no cost of improvement.
nitish joshi (Finance & tax Consultant) 27 March 2011
as per the provisions of section 50 of income tax act,if sale consideration is less than the muncipal valuation than the municipal valuation should be considered as sale consideration for the purpose of calculating capital gains.In your question Rs. 856000(14,56,000-6,00,000) will be considered as short term capital gain.
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