Tax on sale of self constructed house

Kevin
May 6, 2019

I purchased a plot of land in Feb 2017 and constructed a house in Feb 2018 by hiring contractors. Now I want to sell a part of the house. Will the gains be considered long term or short term?

1 Answer
May 6, 2019
It is possible to treat the land and house as separate assets. You can bifurcate the sale amount between land and building on the basis of market value of each of them. Since the land is being sold after holding for more than 24 months, the gain will be considered long term. You will get indexation benefit on the cost of the land. Since the constructed house will be held for less than 24 months, the gain will be short term. I suggest that you contact a CA who will help you with the details.

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