I have entered into a development agreement with builder to construct four floors and basement at his cost on my plot of 200 sq yds owned by me for the last ten years purchased at Rs 25 lac.
Builder gets two floors and I get two floors and basement which will be handed over to me by AUG,2012 duly constructed at his cost.

Market Value of land today is Rs 1.25 crore.

Market value of my two floors when handed over to me will be Rs 60 lac each and value of basement will be Rs 30 lac.
I shall be selling one floor and retain one floor and basement.
What will be the amount of my capital gain ?

Admin’s Response:

Broadly speaking, you sell three floors while retaining one floor and basement with you. The capital gain would be proportionate to total indexation cost of 25 lac for each floor and then deducted from the proportionate cost of three floors sold by you. The two floors retained by you would have to be allocated back out of total cost of construction. By careful planning, there is a scope for lots of capital gain savings. You may write to us for proper guidance with all the facts and figures, cost of construction (floor-wise) and a copy of agreement entered with the builder.