Income tax

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I am a Retd. Govt servant, I am drawing a pension of rupees 12 thousand per month, at the time of retirement I got a amount, from which I purchased a plot of rupees 1.15 lacks in the year 2006, now I had sold the same plot at rupees 3 lack, in the financial year March 2010, am I bound to pay tax on the entire 3 lack or on the profit I earned from investing in a plot, or the entire 3 lacks amount is tax free?

Thxin anticipation

Regards

R K.

 
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Director

You may have to pay some tax depending upon following facts:

 

1. Did you cross age of 65 years at any point of time during financial year 2009-10?

 

2. Do you have any other income from other source?

 

3. Actual date of purchase of plot in 2006, was it prior to 31st March 2006 or later?

 

4. Any investment in LIC, medical insurance, NSC, PPF etc during 09-10?

 

Depending upon the date of purchase, the indexed cost of purchase of plot will be calculated which will be deducted from the sale value to caculate long term capital gain on sale of this plot.

 

If you had crossed age of 65 years during any point in FY 2009-10, your income upto Rs 240000/- is exempt from tax. So if sum of your pension income, other income and long term capital gain as computed above minus the investments in LIC NSC etc is less than Rs 2.40 Lakhs, no tax shall be payable by you. Otherwise tax@ 20% on srplus will be levied.

 

If you are not a senior citizen, please replace figure of Rs 2.40 Lakhs above by Rs 1.60 Lakhs.

 
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Advocate

Assuming

1. That you purchased the house in the F.Y 2004-05

1.1 If you are 65 yrs or more your liability will be Rs.11,900

1.2 In case you are less than 65 before 31.03.2010, your liability would be Rs.27,550.

 
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Advocate

The F Y is mistyped as 2004-05 instead of 2005-06, the capital gain was calculated assuming the plot was purchased in 2005-06

 
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Advocate

However, if the plot was purchased after 31.03.2006, then

1.1 If you are 65 yrs or more your liability will be approxiately Rs.13,000

1.2 In case you are less than 65 before 31.03.2010, your liability would be approximately around Rs.29,000.

 
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