Exclusive HOLI Discounts!
Get Courses and Combos at Upto 50% OFF!
Upgrad
LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Tax to pay

(Querist) 24 October 2014 This query is : Resolved 
Hello Sir, I am paying EMI against home loan of 20 Lacs since Feb 2012. Now I am selling the same house in 36 Lacs. How much tax do I need to pay & how to save that tax?
Anirudh (Expert) 24 October 2014
You have to indicate what is the date of the Registered Sale Deed by which you purchased the property?
Amit (Querist) 24 October 2014
Sir date is 13-Oct-2011
Devajyoti Barman (Expert) 25 October 2014
Regular academic/professional query of the author.
Anirudh (Expert) 25 October 2014
Dear Amit,

Since you are holding this property for more than 3 years (i.e. from 13.10.2011 to 2410.2014), the property in question will qualify as a long-term capital asset.

The gain arising out of the disposal of the long term capital asset is called the long-term capital gain

The long-term capital gain = sale consideration minus indexed cost of acquisition. In your case taking the actual purchase price including stamp duty and registration charges as Rs. 20 lakhs,the indexed cost of acquisition would be Rs. 20 lakhs x 939/785 (785 and 939 are the cost index for f.y. 2011-12 and 2013-14 respectively) = 20lakhs + Rs.239235 = 2239235.

Therefore capital gain = 36 lakhs minus Rs. 2239235 = Rs. 1360765/-

Long term capital gains tax = 20% on 1360765/- = 272153/-

(I am sure, the cost of purchase of the house by you would be much more than Rs. 20 lakhs loan taken by you. Therefore, you have to replace the Rs. 20 lakhs with actual cost of purchase of the house and arrive at the actual capital gains).
You will be able to save the capital gains tax by following the two methods:

(1) you purchase a new house within two years from the date of sale of the present house (you should not have more than two houses including the house which you will be selling). If you do not purchase the house before filing your I.T. return by 31.7.2015, then you have to deposit the entire capital gain amount in a specified bank under capital gains account scheme (not Savings Bank account or FD) before 31.7.2015. You can withdraw the amount for making payment towards new house. In case even after depositing the amount in the capital gains account, if you do not purchase the new house within two years then capital gains tax will be levied.

(2) By investing the entire amount of capital gains in long-term specified asset. Long term specified asset for this purpose means, any redeemable bond issued after 1.4.2007 by National Highways Authority of India or by the Rural Electrification Corporation Limited.

The relevant Sections of the I.T.Act which come into play in your case are Sec. 2(29A), 2(29B), 45, 48 and 54, 54EC.

Please feel free to come back, in case you have any further queries or doubts.

Having given my views, I must also add that from this LCI Forum, you will get prompt advice to GET IN TOUCH WITH A TAX CONSULTANT/TAX EXPERT. (Please do so, and do not believe my views, even if it is technically and legally correct.)
Amit (Querist) 25 October 2014
Thanks sir...
ajay sethi (Expert) 25 October 2014
well advised by MR Anirudh
malipeddi jaggarao (Expert) 25 October 2014
Regular Academic query of the author.
V R SHROFF (Expert) 25 October 2014
well advised by MR Anirudh
Rajendra K Goyal (Expert) 26 October 2014
Agree with the expert Anirudh.
T. Kalaiselvan, Advocate (Expert) 27 October 2014
Though it is a regular academic query, it is appreciable that expert Mr. Anirudh has very properly addressed the query.
Surrender K Singal (Expert) 01 November 2014
What more than than Mr. Anirudh's detailed guidance !


You need to be the querist or approved LAWyersclub expert to take part in this query .


Click here to login now



Similar Resolved Queries :