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Capital gain tax

09 November 2015

hi friends, i have booked one flat 3 yrs back. with no loan . i have paid all money in this three years period. now i want to sell the property. please let me know, what tax will be in this transaction. your help will be highly appreciated. santosh chaskar

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3 Replies

Ruchi (CA) (1410 Points)
Replied 09 November 2015

You would have to pay income tax under the head 'Capital Gains' on the sale of your property on the amount of profit you make on sale.

If period of acquisition is more than 3 years then Long term Capital Gains @ 20 % otherwise Short term Capital gains .

SANTOSH CHASKAR (MBA) (35 Points)
Replied 09 November 2015

Thank you Ruchi. I have booked this property 3 year before,but got completion and possession last month. Is this property comes under long term or short term capital gain?

Ruchi (CA) (1410 Points)
Replied 10 November 2015

Date of allotment of flat i.e. the date of issue of allotment letter would be the date from which you should calculate your period of acquisition., Here, I would like to inform you that in case of long term capital gains, the taxpayer becomes entitled to avail the benefit of an inflated cost of acquisition of the property as prescribed. In addition to this, the Income Tax Act exempts the capital gains from the sale of a house if the taxpayer invests the gains in a residential property within two years from the date of sale or constructs another house within three years from the date of sale. Once the exemption has been claimed the newly acquired asset should not be sold within three years from its date of acquisition, else the earlier capital gain exempted becomes taxable.