Capital gain tax on sale proceed if not purchasing property
joydeep chatterjee
(Querist) 20 December 2011
This query is : Resolved
sir,
we have sold our ground floor in kolkata and received 1500000 rs which we got in three separate DD of 500000/- each for me,my mother and my brother.now I will be investing my 500000/- for purchasing a new flat.but my mother and brother wont invest and gift it to me.Our father died in 2001 december and from that time we have inherited the property.my father purchased the property in 1988 for rs. 33,000/- only.
Now my question is how much capital gain tax my mother & brother has to pay?will it be calculated from 1988 or 2001?please tell me in detail.
Thanking you.
R.Ramachandran
(Expert) 20 December 2011
Long Term Capital Gain = Sale Price – Indexed Cost of Acquisition.
In your case, the index point was 161 in the year 1988 when the property was purchased.
The index is 785 in the year 2011-2012.
The indexed cost of acquisition is 33000*785/161 = 160901.
Therefore capital gain = 1500000-160901 = 1339099.
Capital Gain Tax is to be paid on 1339099 at 20% flat rate. The Capital Gain Tax works out to Rs. 267819.
If this divided by 3, each one of you are liable to pay Capital Gains Tax of Rs. 89273/-
To avoid capital gains tax, you have to invest the amount of gain in a new residential house within two years of the sale of the house.
In the alternative, you can invest it in the specified securities.
You can also deposit the said amount in the capital gains account, but before the end of the financial year in which the property has been sold.
As regards the amount of gift received from your mother and brother, the same will not attract any gift tax, since it is from your family members.
YOGESH NARANG
(Expert) 20 December 2011
agreed with above statement/reply
Shailesh Kr. Shah
(Expert) 20 December 2011
Calculation of Tax by Shri Ramachandran is right.
you have not to pay any tax, however your brother and mother have to pay Rs.89273/= each.
and gift to you by them, no tax liability of any one.
Nadeem Qureshi
(Expert) 20 December 2011
Mr. Ramchandran is rightly explained
prabhakar singh
(Expert) 20 December 2011
Mr. Ramachandran has rightly explained but as you have to reinvest,Mr.Shah is also right,CGT on you.
Raj Kumar Makkad
(Expert) 20 December 2011
As you are investing your sale proceeds in purchasing the subsequent house property within the prescribed period of 3 years from the date of sale and the capital gain tax is lesser than your proposed investment so you need not to pay any tax and if your mother and brother also invest their sale proceeds in the specified securities prescribed by govt. of India then they also not need to pay any tax.
soumitra basu
(Expert) 21 December 2011
The main question is who was the registered owner of the property at the time of sale and when you sold the same.
