Upgrad LLM

capital gain tax

I had a query relateed to capital gain tax on property.
I had owned a flat in apartment in july  2007 which was under construction and possesion was offered in feb 2008. I purchased at 19.00.000 Rs. Stamp duty etc of rs 1,00,000 at the time of purchase. I got woodwork done costing 1.00.000 Rs in 2009. I had invested in Iron grills  for security in 2010 Rs 25000.
I had sold the flat at rs. 41,00,000 in March 2012.
How much will be capital gain and capital gain tax ?
Q2. I has bought another property in Aug 2009 (a flat in apartment). This is still under construction. Possesion and registration shall happen in Feb 2013. Since last year, Nov 2011,  I paid 2,00,000 to builder from my own sources. I need to pay another 6,00.000 to him.  If I pay this from my source then will this 8,00.000 will qualify for capital gain tax extemption.
Please help.

you have purchased flat for Rs.19.00+1.00 registration 1.25 expediture misc.Total comes to Rs.21.25 lacs and you lhave sold the property for Rs.41.00.  There is method of calculation ofcapital gain tax so approach Advocatde/financial adviser how much amount is coming under capital gain tax. Otherswise you can purchase alternative proper;ty for the amount you sold to others.

You have paid Rs.2.00 + Rs.6.00 lac paid to purchase other property then you are getting exemption under capital gaintax.





You have invested Rs.1.25 lac above Rs.19.00 +1.00 lac . You havesold proper;ty forRs.41.00lacs. Generally over and above the amount is capital gain tax. B ut allthe differntional amount is not eligible tax. Depending upon ;the syear of sale it varies. So you approach advocate or financial adviser and ask how much amount you get for capital gain tax.then  you plan for paying tax or alternatively you can reinvestin property.


You have invested Rs.8.00 lac in other property out of Rs.41.00, so you are eligible capital gain tax exception Rs.8.00 lacs. Further sa ing tax take advice of advocate or financial advisder.


Nagaraj N Nyamati  Advocate




Practicing Lawyer

As per fact stated by you, the property purchased by you in 2008 and sold by you in 2012 shall be eligible for taxation at concessional/fixed rate of 20% as Long Term Capital Gains. LTCG has to be calculated as per procedure laid down in the Act i.e. (Sales Consideration-Indexed Cost of Acquistion) = LTCG.

2. In case you do not own any other Residential Property, you are eligible for deduction on investments made in the New Asset. Any amount paid either one year before or two year after for acquistion of such new asset qualifies for Deduction.


As per yours Data

2000000 *780/551 =2831216

100000*780/632 =123418

25000*780/711 = 27426

total of above is 2982060  

4100000-2982060 =1117940

tax is on 1117940*20/100 = 223588/-

U have to invest Rs 1117940 / 12 lakh in another property to save the tax .


I have inherited land through partition after my father's death. My brother was acting as power agent(GPA) and signed a sale agreement on my behalf last year with a buyer. The buyer(developer) could not complete the payments as agreed on initial sale agreement and finally managed to pay the agreed amount a bit later.

Meanwhile, the guideline price of the land has gone up. I am happy for him to transfer the ownership through registered sale deed. Because of guideline price increase, he is requesting me to issus GPA in favour of him - to develop & sell etc.

With GPA, he would be able get appropriate approval and sell the land in blocks/plots to prospective buyers. I am sure this person (holding my GPA), would be required to sell the land at least at guideline prices/above. (This is many folds higher than what we agreed on Sales Agreement). Would GPA is responsible for whatever he gains from that stage onwards - in terms of capital gains?

My question is, when he is going to sell for four to five fold mor prices than at the time of SA, this is a significant amount than what I received. When such a sale is completed by GPA, whether I will be liable for overall sale/gain capital gain tax or GPA is liable for Capital Gains Tax?

I need this clarification before I sign/appoint him as GPA.

I would appreciate your help.





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