Advice

Querist : Anonymous (Querist) 23 December 2011 This query is : Resolved
I have purchased the property in 2001 in Rs. 275000/-lacs now in 2011 I have sold it in 1000000/-. My annual income is 450000/-.
Please tell me in detail the IT provisions regarding sale of property & how this deal will have impact on my return? How can I can save max. tax ?

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Shailesh Kr. Shah (Expert) 23 December 2011
Long Term Capital Gain = Sale Price – Indexed Cost of Acquisition.

The CII is 426 in the year 2001 (assuming Purchase on or after 1-Apr-2001), when the property was purchased.

The CII is 785 in the year 2011-2012.

Index Cost of Acquisition is Rs.506748/-

LTCG = Rs.4,93,251/-

Tax 20% = Rs.98650/-

You have to pay income tax on Rs.4,50,000/-. in addition to Rs.98650/-

If invested :-
1.upto Rs.1 Lac ppf,nsc,lic u/s 80c;
2.upto Rs.20000 u/s 80ccf;
3.upto Rs.15000 u/s 80d.

You can reduce your income tax.

H.M.Patnaik (Expert) 23 December 2011
In addition to what Saileshji has answered, you can plan to invest the amount of LTCG in prescribed Bonds or utilise the funds in acquisition of new Capital Asset as per provisions of IT Act
within the prescribed time limit to reduce the liability.