Capital gain tax

Cost inflation Index for 2004-05 is 480

Cost inflation Index for 2015-16 is 1081

Inflated index cost of  property is 18 x 1081/480 = 40.53 lks

Add improvement cost and calculate inflated index cost of improvement [repairs etc]

Deduct brokerage if applicable from 46.   

Net gain is  5 to 6 lks.  

i am not sure if commercial shop comes under 54EC/54F/54. 

other experts also throw some Light.

 

It will be a short term capital gain, because it is depreciable asset, capital gain would be 46lakh-1.73lakh. And although it will be Short term capital gain, yet you CAN INVEST in section 54EC, and 54F property, and exemption will be allowed, because for purpose of section 54EC, OR 54F, Asset holding should be long term (as per ICAI view given in study materials). If you want to invest in 54F, then you have to invest full 46lakhs for full amount of exemption, and if you invest in 54EC, you have to invest the amount of Capital gain only and the whole sale proceeds. better go for 54EC, but keep in mind time limit which will be 6 months from end of financial year i.e. 30 sept 2016 for 54EC

Thanks dear mr.Raj at Bajaj. R u sure abt your view of 54EC or 54F ? Is there any supportive case on the subject ? I am afraid that this cap gain w b treated as short term under sec 50 and 54EC OR 54F w not be applicable. ( dept of IT may take this view and reject exemption) Pl give supportive material and oblige so I can save burden of tax. Pl reply.rgds..sharad

Refer Delhi High Court case CIT vs. Rajiv Shukla (2011) 334 ITR 138, and Bombay High Court Case CIT vs. Ace Builders Pvt Ltd. (2006) 281 ITR 210.

Agree with Rajat. Refer "cit vs rajiv shukla (2011) 334 itr 138 (delhi)". It's available ICAI select cases for ca final.

Thanks a miliion friends.

The short capital gain is 546250.it is appicable to sec.54EC.sec.54F in cases of investment in residential house