Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

Capital gains of sale of property

Pavan Mundra (Head Accounts) (43 Points)

08 June 2016

I had purchased a flat in FY 2009-10 for Rs. 18 Lacs + Stamp Duty Rs. 90,000/- + Society Transfer Charges Rs.15,000/- + Renovation on Property Rs. 2 Lacs(No bills are there). I am selling that Property in FY 2016-17 for Rs. 50,00,000/- what wil be the amount of capital gains, Income Tax to be paid and how I can save these capital gains.

Reply
Follow
Share

5 Replies

Senu Reddy (ca final) (291 Points)
Replied 08 June 2016

Based on calculations

YOUR LONG TERM CAPITAL GAIN = 29,85,000/-

Long term capital gain Tax = 2985000*20% = Rs 5,97,000/-

Exemption available under the following ways

Section 54:

In case the the immovable property sold / transferred is a residential house, and if out of the capital gains, a new residential house is constructed within 3 years, or purchased 1 year before or 2 years after the date of transfer, then exemption on Long Term Capital Gain is available on the amount of investment in the new asset to the extent of the capital gains. It may be noted that the amount of capital gains not appropriated towards purchase or construction of a new house within 3 years may be deposited in the Capital Gains Account Scheme of a public sector bank before the due date of filing of Income Tax Return. This amount should subsequently be used for purchase or construction of house.

Section 54F:

When the asset transferred is a long term capital asset other than a residential house, and if out of the consideration, investment in purchase or construction of a residential house is made within the specified time as in sec. 54, then exemption from the capital gains will be available as:

If cost of new asset is greater than the net consideration received, the entire capital gain is exempt.
Otherwise, exemption=Capital Gains x Cost of new asset/ Net consideration. It may be noted that this exemption is not available, if on the date of transfer, the assessee owns any house other than the new asset.

It may be noted that the Finance Act has provided that with effect from assessment year 2001-2002, the above exemption shall not be available if assessee owns more than one residential house, other than new asset, on the date of transfer. Investment in the Capital Gains Account Scheme may be made as in Sec.54.

Pavan Mundra (Head Accounts) (43 Points)
Replied 08 June 2016

Sir should I dont get benefit of Cost on Indexation.

Senu Reddy (ca final) (291 Points)
Replied 08 June 2016

Pavan Mundra (Head Accounts) (43 Points)
Replied 08 June 2016

Particulars	Amount
Flat Price	1,800,000
Stamp Duty	90,000
Society Trs.	15,000
Renovation	200,000
Total Cost	2,105,000
Sale value	5,000,000
Profit	2,895,000
Without Indexation