capital gains

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Hitesh malviya (Querist)
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04 January 2008 Dear Sir,
Can you please let us know the rate of tax that shall be applicable on profit if a property is sold after 5 years of purchase.
Also can I know that if I have acquired a property 5 years back for Rs 15 lacs, what will be the indexation value beyond which the profit on tax shall be calcualted.
Regards,
HK Malviya

CA. Aryendra

CA. Aryendra (Expert)
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05 January 2008 You have sold property after 5 years it means there is Long Term Capital Gain

Long Term Means
If The assets held for more than 36
months.

Rate Applicable is 20% and this is to be increased by surcharge (if Applicable) and education cess

Indexation:-

Indexation is relevant to computation of Long Term Capital Gains only. It is applied to computation of indexed cost of acquition and index cost of improvement in respect of capital assets.Cost of Inflation Idex are as under:-

F.Y Cost of Index
1997-1998 331
1998-1999 351
1999-2000 389
2000-2001 406
2001-2002 426
2002-2003 447
2003-2004 463
2004-2005 480
2005-2006 497
2006-2007 519

Suppose you have purchased property in the year 1998-1999 and sold in year 2005-2006 then cost is

15*497/351

Hitesh malviya

Hitesh malviya (Querist)
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17 January 2008 Dear Mr Gangwar,
Many thanks for the nice reply. Regards,

Hitesh Malviya