LTCG

Querist : Anonymous (Querist) 24 February 2010 This query is : Resolved
My son bought a plot for 50 lakhs in 2007. Now he is selling it for 90 lakhs.out of 90 lakhs he will get 20 lakhs in March,10 as advance and pay to the bank to fore close the loan taken to buy the plot (to get the plot documents for rggeistration in April,10).The remaining 70 lakfs he has to pay to a builder in May,10 for t the flat he has booked.He has not availed any tax concession for the loan taken to buy the plot.Kindly clarify his income tax and LTCG liabilty for FY 09-10 for the 90 lakhs .

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Kumar Thadhani (Expert) 24 February 2010
Your query is incomplete kindly clarify that he has bought before march 2007 or after2007 that is assessment year 2007-08 or 2008-09 it is then able workout LTCGains.

A V Vishal (Expert) 24 February 2010
Long Term Capital Gain Tax Calculation
--------------------------------------------------------------------------------

Sale Consideration xxx

Less: - Expenses Incurred for Transfer xxx

Net Sale Consideration ---
xxx

Deduct:
Indexed Cost of Acquisition xxx

Indexed Cost of Improvement xxx
---
LTCG xxx
---

SINCE THERE ARE MISSING GAPS IN THE QUERY IT WILL BE DIFFICULT TO ANSWER YOUR QUERY.

Querist : Anonymous (Querist) 24 February 2010
My son bought the plot in 2005 and not in 2007 which I wrongly mentioned due to over sight.sorry for the error. Kindly clarify.

Raj Kumar Makkad (Expert) 24 February 2010
follow the formular cited by vishal.

A V Vishal (Expert) 25 February 2010
There is no liability for 2009-10 since the registration is slated for in April 2010 pertaing to F Y 2010-11 (A Y 2011-12). Since the CII will be notified after the Budget 2010, it is difficult to arrive the answer for your query, however, by experience I can say there is going to be no tax on the transaction since 90% of the total consideration being received is being utilized again for purchase of a new house and repayment of the old housing loan.

Vineet (Expert) 25 February 2010
The actual computation depends upon the exact facts of the case i.e. date of purchase, date of sale and date of purchase of new house in addition to the actual purchase and sale consideration amounts.

In this case there will be some tax liability as the matter is covered u/s 54F. As the entire sale consideration is not being invested in new house, the taxable capital gain in the given facts is

Long term capital Gains X 2/9.

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