Bharat M K (Director) 01 February 2012
Dear Esteemed members.
One of my close friend bought 1 Bedroom flats in 2009 at Delhi for about Rs 25 lac and sold it for 35 lac ,after two years to buy bigger 2 Bedroom flat in the same year 2011 at Delhi for the cost of 50 lac. Since the amount was utilised and top uped to buy bigger flat , what is the implication of Short Term Capital gain. Is he liable to pay any Capital gain tax?.
Regards
Bharat.
Ajay Agarwal (Student) 02 February 2012
In above case assesse liable to pay short term capital gain on profit earn on selling of house.
Calculation of Short Term Capital Gain
Sale Proceeds = 35 laces
Less- Cost of Purchase= 25 laces
Short Term Capital Gain= 10 laces
Now Tax should be calculated on 10 laces Rs. as per slab rate
Slab Rates For F.Y 2011-12 means A.Y 2012-13 (Man Individual)
0 to 180000 = Nil
180001 to 500000=10%
500001 to 800000=20%
Above 800000 = 30%
The above slab rates apply for all income of assesse including short term capital gain.
But if assesse acquired house more than 3 years (Long term Capital Gain) he can avail exemption in Tax.
As per section 54 of income Tax Act, when any assesse sold his Long Term residential house property and put gain into purchase of other Residential House Property. He shall nothing taxable.
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