Calculate capital gain

Please clarify the type of property sold. Is it agricultural land situated in rural area? If it is then no capital gains arise as it would not be a capital asset altogether.

Thanks for response.

Yes it is agricultural landed property, situation in a small town. Due to some reason the cultivation on that property was stoped since 1988. By the way what is the definition rural area?

thanks.

Ismail

Hi,

If this is not the capital gain in that case how i can workout the taxable income.

can you provide me the template which can give me some idea and the proceedure that i should follow to complete the online submission of tax return.

thanks

Ismail.

Urban land is any land situated :

a) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year; or

(b) in any area within such distance, not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a), as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette;]

If it is not urban land then it will be considered to be situated in rural area and thus the exemption.

Thanks once again Ruchi,

As per the above explaination, my location is under Municipalty jurisdiction and has more than 10 thousand population so i don't think it is exempted.

can you guide how i can compute my tax liability.

thanks

Ismail 

• Capital gain tax is applicable on sale of capital assets and payable by a person who is owner.
• find out the market value of land as on 1 April 1981.
• Then calculate Index cost of purchase = market value of land*index cost 2013/index cost of 1981.
• Sale consideration is market value i.e stamp value or actula consideration which ever is higher
• long term capital gain = Sale consideration - index cost of purchase.
• if Assesse buy a residential flat then claim sec 54f for exemption of capital gain tax.

Lets assume market value of land at 1981 is rs. 50000.

Sale consideration                              = 85 lacs

less: Index cost of acquisition             = 4.695 lacs

50000*939/100

Long term capital gain                       = 80.305 lacs

If you investment in residential property then you can claim exemption u/s 54f

Exemption amount = Capital gain*Amount invested/net sale consideration

                            = 80.305*12.5/85

                            =11.81 lacs

Taxable capital gain @ 20% =( 80.305-11.81) @ 20%= 13.7 Lacs