I have sold house property in Gujrat and the buyer has taken bank loan.Bank has given two cheques one for sale deed value and other for extra work in house. How it will be shown in ITR?

The total amount of both cheques will be considered as your sale consideration.

LTCG will be calculated as:

Sale consideration - Indexed value of purchase cost.

The profit will be taxed at 20%.

But if you invest the sale proceeds in buying another house, then you can avail exemption.

If you have sold a house property in Gujarat and the buyer has taken a bank loan, and the bank has given you two cheques - one for the sale deed value and the other for extra work in the house, the transaction will be treated as follows for income tax purposes:

Sale deed value: The sale deed value will be taxable under the head "Capital Gains" in your income tax return. The capital gains will be calculated by deducting the indexed cost of acquisition (i.e., the purchase price adjusted for inflation) and any allowable expenses related to the sale from the sale price. The resultant amount will be taxed at the applicable rate of tax based on the holding period of the property (i.e., long-term or short-term).

Extra work amount: The amount received for extra work in the house can be treated as income from other sources. However, you can also deduct the cost of extra work from the amount received. If there is any profit element (i.e., if the amount received is higher than the cost of extra work), it will be taxable as income from other sources in your income tax return.

It is important to note that you should maintain proper records of the sale transaction, including the sale deed, bank statements, and other relevant documents, to ensure compliance with tax laws and regulations. Additionally, it is advisable to consult a qualified tax professional for advice regarding your specific situation and to ensure that you comply with all applicable tax laws and regulations.