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# Advance tax calculation on ltcg(Income Tax)

This query is : Resolved

( Author )
07 July 2012

Dear Members

My Principal asked me to Calculate Advance Tax payment details of one Individual.

Facts are:
1.Plot of Land not agricultural sold:Rs 10000000/-On 5 June 12
Plot of Land Purchased: Rs.1399711/- On 17 Oct. 07

I calculated LTCG by taking 2011-12 (assuming for near about) n Got LTCG rs. 8008586/-.
2. Plot of Land sold: Rs 5000000/- On 8 May 12
Plot of Land Purchased: Rs.194400/- On 11 jan. 2008

I calculated LTCG by taking 2011-12 (assuming for near about) n Got LTCG rs. 4723042/-.
My Q is what is CII for 2012-13?
And How much advance tax installments and when client should pay to avoid Interest penalty U/S 234.

CA CS Amit S. Kedia

( Expert )
07 July 2012

CII for 12-13 has not been notified till date..
It will be notified soon...
You can tentatively take inflation of 10-12
% compare to last year and calculate approximate liability for LTCG.

Member (Account Deleted)

( Author )
07 July 2012

Sir according to 2011-12 CII Tax liability on LTCG is 2580950/-.

How much amount of advance tax and when client need to deposit?
another situation is if client refuse to pay advance tax then i have to tell him the Interest Penalty U/S 234 A/B/C for advising exact Tax+Interest.

please tell me amount with section n show me the working as i am not able to work out.

Hoping for Help

Thanks

CA PARAS BAFNA

( Expert )
07 July 2012

Advance Tax is paid on the basis of estimation of tax liability. You may take 840 as CII for FY 2012-13.
.
1. On Long Term capital Gains, you are required to pay entire Capital Gains Tax as advance tax on the Installment date just following the date of transfer. In the First & Second Cases, you are supposed to pay Advance Tax by 15-09-2012.
.
2. In case you are going to make investment for claiming the capital gains exempt, you may defer the tax payment, as finally , at the year end , there would be no tax liability.
.
3. As full tax has to be paid on Capital Gains, there is no need to pay in installments.
.
(The above reply may kindly be read with the reply given by me later in this query)

Member (Account Deleted)

( Author )
07 July 2012

Respected Amit Ji & Paras Ji

Client have little STCL which i use for set off against ltcg and not have any planning for Investment for clamming exemption.

as tax (assuming) 24lacs. I advised him for pay the whole tax as on 15sept.

but if he denied or any liquidity problem arise then by not paying adv tax up to 31 march how much interest amount n in which 234 sec. he has to pay.

As I take help of S/W I got answer like:

Interest

u/s 234 B Rs. 2580900 x 1%
=25809
u/s 234 C(I) Rs. 774200 x 3 x 1%
=23226
u/s 234 C(II) Rs. 1548500 x 3 x 1%
=46455

u/s 234 C(III) Rs. 2580900 x 1 x 1%
=25809
Total 121299/-

now is it correct??? and plz describe me this. 1mth n 3 mth concept for interest.. I m just puzzled

CA CS Amit S. Kedia

( Expert )
07 July 2012

Dear Mr. Nishant,

it is not possible to have set off of STCG with LTCG.
So pls check it.

Member (Account Deleted)

( Author )
07 July 2012

Deart Amit Ji
STCL can be set off against LTCG

CA PARAS BAFNA

( Expert )
07 July 2012

@ Nishant Jain,

You are right as the assessee can claim set off of STCL against LTCG.
.
Interest Calculation is correct as far as Section 234C is concerned.
.
Calculation U/s 234B will stand correct if you file Return in April itself (if you can not do so, as CPC Softwares may not be ready by the time) at least pay the taxes by 30th April 2013.
.
My earlier statement does not hold good, as on rechecking I found that CG Tax can also be paid in installments. I take it back.
.
Further, when the first installment has been paid , and later on between 15-09 to 15-12, suppose... capital gains arises, in such a situation interest U/s 234C would not be levied on the first installment .

CA CS Amit S. Kedia

( Expert )
07 July 2012

Sorry for mistake, thanks for correcting me.
I have not read question properly.
The working provided by is correct and last month interst will be for 1 month only that is from 15th march to 31st march, part of the month cosidere full month.

CA PARAS BAFNA

( Expert )
07 July 2012

The Solution to the Puzzle:
1. You were supposed to pay 30% of amount by 15-09. You haven't paid that. You will be charges interest @ 3% (for 3 months @ 1%) from 15-09 to 15-12.
2. Upto 15-12 you have to pay 60%. But you haven't paid. SWo till 15-03- you have to pay 3% Interest ....and so on.

Member (Account Deleted)

( Author )
07 July 2012

Sir

My another Q is if I invest whole amount of LTCG profit in agriculture land and letter on sale and make the profit which is also exempt then

1.is it the best solution for Tax planning?
2.any extra conditions are there for being this planning sucessful.

CA CS Amit S. Kedia

( Expert )
07 July 2012

For claimimg the exemption the land transferred should be agricuture land whether urban or rural.
But in your case as you said it is not an agriculture land then exemption is not available.
Further, even if it is an agricuture land, later, the tax shall be exempt only if it is a rural agriculture land u/s 10(37).

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