Q.Mr. Kundu purchased a plot of land in May 2018 for ₹6,00,000. In June 2021, he spent ₹1,50,000 on levelling the plot and constructing a boundary wall (a capital improvement). He sold the plot in September 2025 for ₹15,00,000, paying brokerage of ₹30,000 on the sale. Compute the Capital Gain, stating clearly whether it is short-term or long-term.

The plot was held for well over the 24-month threshold that applies to immovable property, so this is a long-term computation.

Step 1 — Classify the asset: the plot (immovable property) was purchased in May 2018 and sold in September 2025 — a holding period of over 7 years, far exceeding the 24-month threshold applicable to immovable property. It is therefore a Long-term Capital Asset, and the resulting gain is a Long-term Capital Gain.

Step 2 — List the figures:

A frequent error is forgetting to deduct the Cost of Improvement separately from the Cost of Acquisition — students sometimes ignore the boundary-wall/levelling expenditure entirely, or wrongly treat it as a revenue r …