Indexing on leased land

POSTED BY Som R ON December 26, 2012 10:23 pm COMMENTS (2)

I own a plot since the 1970s. We built on it in 1990 through a builder, and got 1 flat + some compensation for it. The plot is still in my name.

I want to sell the flat + title of the plot (even though FSI is consumed).  Calculating the indexed value of the flat is not a problem since I had got a valuation done in 1991 for wealth tax reasons.  

I am getting conflicting reports on the indexing of the land, because the land is on 998 year lease. Can I index leased land, or does the entire compensation attributed to land have to be reinvested?

Thank you.

2 replies on this article “Indexing on leased land”

  1. Som R says:

    Thanks, Ashal. Is this also valid for a “perpetual” lease of 998 years? (I should have highlighted this data earlier).

  2. Dear Som R, the plot of land is not a free hold one & hence you are merely transferring your lease right. In this case whatever capital gains ‘ll be there, full compensation is to be invested into a new residential property under section 54F if you want to save Tax outgo.



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