Income tax on long term capital gain

This query is : Resolved 

11 July 2018

Dear Experts,
I have purchased a house in August 2017 , cost of house was 22 purchase house loan of 17 lacs taken by me from OBC. I have sale out a plot in February 2018 ,sale amount is 12 lacs which was purchased by me in 2010.purchased amount was 5 lacs.
I have deposited 12 lacs rupees for my home loan which I got after selling a plot.
My query is that I have to pay any tax or not for long term capital gain.
Thanks and regards

N.J.S.Rajkumar alias narasimha (Expert)
11 July 2018

" CA Club" of this same forum would be right forum to give you a perfect reply.

N.J.S.Rajkumar alias narasimha (Expert)
11 July 2018

You could see the details of "CA Club India ' Forum details below this Thread.

raj (Querist)
11 July 2018

Thanks Sir for your valuable reply

Ms.Usha Kapoor (Expert)
12 July 2018

I agree with Narasimha.

N.J.S.Rajkumar alias narasimha (Expert)
12 July 2018

Welcome Please ........................................

Ms.Usha Kapoor (Expert)
12 July 2018

I agree with Narasimha

N.J.S.Rajkumar alias narasimha (Expert)
12 July 2018

Presently the 7th person today to be agreed by Ms.Usha Kapoor is my self and before the end of the day there could be more than 100 posts even posted before 10 years would be agreed by Ms.Usha Kapoor. If she is kind enough atleast towards my self she should ignore my posts with out any meaningless agreeing.

Ms. Usha Kapoor,

What is your opinion on the latest post of Mr. NJS Rajkumar alias Narasimha? I hope, you would agree on that also, as now a days, instead of giving any legal advice, you have started only agreeing with the advice of anyone and everyone, even without knowing the subject matter.

Here you are missing the opportunity to provide a solution to the problem of the querist, as earlier you boasted that you were perfect in Income Tax matters.

However, Mr. NJS Rajkumar should be thankful to you, as you provided him a very good opportunity to make an additional post, may that be helpful to anyone or not. Is not he a thankless fellow to that extent, whereas earlier he used to be your staunch supporter in all of your wrong or right actions?

R.Ramachandran (Expert)
12 July 2018

Amount of Capital Gain = Sale Proceeds MINUS Expenditure (like Advertisement, Commission paid to Authorised Broker against valid receipt etc.) MINUS the Indexed Cost of Acquisition of the Asset.

Indexed Cost of Acquisition of the Asset can be worked out by following the formula:

A x 272 divided by 167. (Here "A" is the Purchase price in the Financial year 2010-11 (as you have not indicated the exact month in which the plot was purchased, but simply indicated that you purchased it in the year 2010, it is taken as F.Y. 2010-11 and the applicable index as 167. If the plot was purchased prior to March 2010, then you have to apply the index of 148 instead of 167.) + Stamp Duty + Registration charges paid at the time of purchase; 272 is the Index for property sold in the year 2017-18; and 167 is the base index value in the year 2010-11.)

Thus, in your case, the Indexed cost of Acquisition of the plot would be: Rs. 5,00,000 x 272 divided by 167 = Rs. 8,14,371/-
(to the Rs. 5 lakh you can add the stamp duty + Registration charges paid)

Long term capital gain = 12,00,000/- MINUS Expenses incurred if any MINUS Rs. 8,14,371/- = Rs. 3,85,629/- say 3,85,630/-
(from Rs. 12 lakhs, you can deduct the brokerage or other expenses like Advt. etc., incurred provided you have proper Receipt)

Capital Gains Tax = 20% of 3,85,630/- which comes to Rs. 77,126/-

By adopting any one of the following methods the payment of Capital Gains Tax can be avoided.

(1) By purchasing a new property for a value which is not less than Rs. 3,85,630/- within 2 years from the date of sale.

(2) By taking National High Way Authority Bond for the entire amount of 3,85,630/- for 5 years. The Bond will give 5.75% interest, but the interest is taxable. In case no new property is purchased, the Bond method is most advisable, as in this method, even though the interest rate of 5.75% is less than the normal rate of interest, still since the amount of Rs. 77,126/- is not being spent but being invested, the ultimate amount that will remain in hand after 5 years is higher compared to Rs. 3,08,504/- (3,85,630/- minus 77,126/-)

Ms.Usha Kapoor (Expert)
15 July 2018

I was quitting and busy with my ranking work.That's why I' was unable to give detailed replies to expert queries.

On and Off get Tax Cases also;+Same clients coming . fr\om Gujarat etc.;Unless I do quality w9rk they wont come again.. can do IT Query could do but THAT COST INFLATION ndex Tables ETC I'LL HAVE T9 SEE. iM NOT N A MOOD TO DO,

What a lame excuse of Ms. Usha Kapoor, while legal expertise seems to be out of her reach! She believes in achieving rank by agreeing even with quacks, as if that can prove her to be an expert. That way, she can only prove herself as one of the several quacks making only vague, misleading and irrelevant posts on the site.

Anyway, with the best of luck for her.

Ms.Usha Kapoor (Expert)
16 July 2018

If capital Gain s less than new house no tax is levied.If it s more we can claim section 54 54 EC, 54F etc deductions or exemptions.
You reported our capital Gain is Rs, 385630.It is less than the cost of new House Rs.22 lacs. Hence no tax is levied.According to section 54 of It act If capital gain s less than new house your entire capital gain is exempt from tax. According to section 54 if capital ga8n is less than new house entire cost of house is exempt. However this exemption is available to one Residential House only.Rest is OK.

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