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Long term capital gain tax on sale of a residential plot

Tax queries 4476 views 1 replies

R.K.BANSAL.

Sr manager

24 Points Posted on 04 May 2012

I've sold a residential plot and need to buy a builder flat. Want to understand the LTCG tax implications. Pls help me by clarifying the following queries:

1- Can we purchase 2 flats or all the proceeds have to be invested in one flat only?

2- How to calculate the capital gains- the plot was bought in 1993 and sold in Apr 2012?

3- What are the expenses (like brokerag etc) that can be deducted from the proceeds to calculate the LTCG tax?

Replies (1)

CA Siddhi Gupta

Consultant (RAS)

145 Points Posted on 04 May 2012

Correct me if i am wrong

1) u can purchase only 1 flat

within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house

2) Cal of LTCG

Sale Proceeds xxx

Less: index cost of acquisition

= Cost*(Cost inflation Index for 2012/cost inflation index for 1993) (xxx)

Less: index cost of improvements

= Cost*(Cost inflation Index for 2012/cost inflation index for yr of imp) (xxx)

Less: Exp incurred for sale of asset (xxx)

LTCG

3) Legitimate Exp incurred in connection with the sale of asset