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Rajeev1978 (Manager)     11 December 2016

Exemption on capital gain tax

My mother(65yr old) had inherited a house from her maternal side which she sold in 2012.She invested a part of the proceeds in a land and a house in the year 2013.She had taken some loan from relatives during the construction of the house.Now she wasnts to sell off the land and construct a top floor on the house and pay off her debts. Will she be eligible for Exemption on Long Term Capital Gain Tax?It may be noted that she had only one residential house in 2012 and even now she has that single house which she purchased in the year 2013



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 3 Replies

Ms.Usha Kapoor (CEO)     13 December 2016

 

Affter 3 years of holding pweriod  if her capital gain is more than the land+house and  house she purchased the  excess will be taxed as Long Term Capital Gains tax even if she invests  in house poroperty for self occupation. She wil be lialble to 20% long /Term  capital Gains Tax at the rate o f20%.If th new house is more than the capital gain or equal to the capital gain she will be exempt from long term capital gains tax.The house  she xconstructed using the land starting from the date of purchase of land  till she completed constructiuon in 2013 should have been completed in  3years. Otherwise she would be liable to short term capitalgains tax.As expalined above if your capitl gains are in excess of the cost of land and house unless they invest in section 54 Rural Electrification bonds or construction or purchase of a new residntial house for self occupation or investing in a capital gain schme in  public sector bank you will be liable  to Long term capitl gains tax.I'm giving  a green signal to you to start constructing a new residential house as soon as possible.If you appreciate this answer   please give me all my  profile likes.

Ms.Usha Kapoor (CEO)     18 December 2016

 Dear Mr.Rajeev,
 
I need two details from you to correctly calculate capital gain and its tax from you. When did your Mother actually purchase the land? Is it in the year 2013? Actiual land sale price also I need or current  Market value of sale price. These two detailsl I need to corectly calcualte your long term capital gains tax. To calculate long term capital gains tax there is a formula. Indexed cost of acqisition of land=Actual cost of purchase OF LAND*(CII YEAR OF SALE)/(CII YEAR OF PURCHASE) capital gain=sale price - indexed cost of acquisition Long term capital gain tax=20% of capital gain. The previous answer I sent was wrong and not that relevant for our  purpose. I wrote was right but for savings point of view I wrote. Let us see how much the land would fetch ands send me the details once again. I'd calcualte and would save capitqal gains from tax.Plese delete my previous ansawer. this is 100% correct. I f you APPRECIATE THIS ANSWER PLEASE GIVE ME ALL MY PROFILE LIKES

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Ms.Usha Kapoor (CEO)     18 December 2016

 Dear Mr.Rajeev,
 
I need two details from you to correctly calculate capital gain and its tax from you. When did your Mother actually purchase the land? Is it in the year 2013? Actiual land sale price also I need or current  Market value of sale price. These two detailsl I need to corectly calcualte your long term capital gains tax. To calculate long term capital gains tax there is a formula. Indexed cost of acqisition of land=Actual cost of purchase OF LAND*(CII YEAR OF SALE)/(CII YEAR OF PURCHASE) capital gain=sale price - indexed cost of acquisition Long term capital gain tax=20% of capital gain. The previous answer I sent was wrong and not that relevant for our  purpose. I wrote was right but for savings point of view I wrote. Let us see how much the land would fetch ands send me the details once again. I'd calcualte and would save capitqal gains from tax.Plese delete my previous ansawer. this is 100% correct. I f you APPRECIATE THIS ANSWER PLEASE GIVE ME ALL MY PROFILE LIKES

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