1.1.

Sale of Immovable Property (NCG02)

Verification Issue

Whether the taxpayer is liable to file return of income on account of capital gains arising from the
sale of immovable property.

Overview

The capital gain arising on transfer (Section 2(47)) of a capital asset (Section 2 (14) is chargeable to
Capital Gain tax as per Section 45 of the IT Act. Primarily, there are two types of capital gains depending
on the period of holding i.e. Short-term and Long-term Capital Gain. For Long-term Capital Gain, the
asset should be held for more than 36 months. The period has been reduced to 24 Months by the
Finance Act 2017. The method of computation of capital gain is provided in Section 48, read with other
provisions of the IT Act. In general, a transfer of a capital asset is chargeable to Capital Gains unless it
is specifically exempt. Income chargeable under capital gains is computed as below:

Full value of consideration – (indexed cost of acquisition/improvement + expenditure incurred wholly

and exclusively on such transfer)

 Development agreement: In case of Development Agreement, the developer undertakes to

hand over a part of the developed property to the owner. Some money may also be paid up
front. In such cases, Capital Gain is chargeable and the FVC would be fair market value i.e. stamp
value of such part along with upfront money received.
 Compulsory Acquisition: Capital Gain is taxable in the previous year in which compensation is
received. W.e.f. 01.04.2004, Capital Gain on compulsory acquisition of agricultural land in India
is exempt under section 10(37).
 Agricultural Land: The most notable exemption from Capital Gains is in respect of agricultural
land. However, land within the jurisdiction of any municipality or within certain specified limits
of a municipality is not covered under such exemption.
Some important aspects are:

 A taxpayer is liable to file return of income if the total income including capital gains exceeds
before claiming any deduction under Chapter VIA the maximum amount not chargeable to tax
even if tax has been deducted at source or paid by means of advance tax, self-assessment tax
etc.
 Receipt of cash payment of Rs. 20,000/- or more attracts provisions of section 269SS unless
both seller and buyer are agriculturists.

Information Source
The related information source and key fields are as under:

 SFT-012 (Seller) – Sale by any person of immovable property.

 TDS-194L – TDS Statement - Payment of Compensation on acquisition of capital asset (Section

194L).

 TDS-194LA – TDS Statement - Compensation on Acquisition of certain immovable property

(Section 194LA).
 TDL-194LA – Certificate u/s 197 for deduction at lower rate on compensation on acquisition of
certain immovable property (Section 194LA).

Note:

 The “Information Source” field displays the name and PAN/TAN of the filer.
 The “Value” field displays the amount of consideration paid.
 The ‘Information status’ field displays if the taxpayer has /has not submitted the response.

Submission of Response
The response has to be provided in following format (Refer Response category – Taxability of sale of
immovable property):

Code Description Response Remarks

A1 Total receipts as per <Amount> + Remarks Refer Note 1 & 2.

taxpayer pertaining to
above information

A2 Value adopted or assessed <Amount> + Remarks Refer Note 3.

for the purpose of payment
of Stamp Duty

A3 Value taken for <Amount> + Remarks Refer Note 4.

computation of capital gains

A4 Less: Amount relating to <PAN year wise list> + Remarks Refer Note 5.
other year/ PAN

A5 Less: Amount covered in <Amount> + Remarks Refer Note 6.

other information

A6 Less: Exemption/ <Exemption/Deduction/Expenditure Refer Note 7.

Deduction/ Expenditure/Set Category wise list> + Remarks
off of Loss

A7 Income/Gains/Loss <Amount> + Remarks Refer Note 8.

Guidance for Submission of Response

The guidance for submission of response is as under:

1. Total receipts as per taxpayer pertaining to above information (A1) enter here the total
amount received/ receivable against the transfer of the property.
2. If the taxpayer has not received any payment as above or a different amount has been
received, the total receipts related to above information (A1) may be shown as 0 or a
different value may be given. Suitable remarks may be provided in the remarks text box.
3. Value adopted or assessed for the purpose of payment of Stamp Duty (A2) value at which
stamp duty has been paid or is payable is to be entered here. In case, the same is not
applicable e.g. in the case of compulsory acquisition, leave the field blank. As per section
50C or 43CA, if sale amount is lower than the value taken for payment of stamp duty is to
be considered for computing income.
4. Value taken for computation of capital gains (A3) indicate here the value which has been
considered for computation of income. If value taken for payment of stamp duty is higher
than the sale amount and it is claimed that the former value exceeds the fair market value,
give appropriate remarks in the remarks text box.
5. Amount relating to another year/PAN (A4) – This row may be filled if total receipt or a part
of it (A1) has been considered in some other year. The details are required to be given in
the relevant table. If the receipts relate to some co-owner, the taxpayer should also provide
the PAN of such co-owner. Suitable remarks may be provided in the remarks text box.

PAN F. Year Amount Remarks

More rows can be added by clicking on the button ‘Add Row’. Suitable remarks may be
provided in the remarks text box.

6. Amount covered in other information (A5) - This row should be filled in case of repeated
reporting of the amount. In case of duplicate value, the entire amount may be mentioned
under Amount covered in other information (A3) such that Income/Gains/Loss (A5)
become 0. Suitable remarks may be provided in the remarks text box.
7. Exemption/Deduction/Expenditure/Set off of Loss (A6) if any Exemption/ Deduction/
Expenditure is allowable, the same is to be mentioned here. If this field is selected, the
following row is displayed:-
Nature of
Exemption/Deduction/Expenditure/ Amount Remarks
Set off of Loss

Drop down list for Exemption/ Deduction/ Expenditure has the following values:-

o Agricultural Land outside specified limits

o Capital Gains –Cost of Acquisition u/s 48
o Capital Gains - Cost of Improvement u/s 48
o Capital Gains - Expenditure incurred wholly and exclusively in connection with
transfer u/s 48
o Capital Gains - Deductions from Capital Gains u/s
54/54B/54D/54EC/54EE/54F/54G/54GA/54GB
o Set off of Loss
o Others
More rows can be added by clicking on the button ‘Add Row’. Suitable remarks may be
provided in the remarks text box.

8. Income/Gains/Loss (A7) is a computed figure (A3 – (A4+A5+A6)) and is the income

chargeable to tax.