CAPITAL GAIN
This query is : Resolved
10 March 2008
1-ONE LADY HAD A HOUSE WHICH IS HER!S NAME BUT PAYMENTS ARE MADE BY HER HUSBAND BUT IN MUNCIPAL RECORDS THE HOUSE IS HERS NAME WHO IS THE OWNER OF THEPROPERTY.
FROM TOTAL PAYMENTS OF THE HOUSE SHE PAID RS.25000/-BALANCE AMOUNT PAID BY HER HUSBAND
SHE ALSO ACQUIRE A LAND FOR RS.50000/-IN LAST TEN YEARS FROM HER PIN MONEY AND SOLD DURING THE YEAR FOR RS.1400000/-
FROM THIS AMOUNT SHE GIVE RS 800000/- TO HIS SON FOR PURCHASE OF NEW HOUSE
WHETHER RS.800000/- PAID TO SON IS EXEMPT FROM CAPITAL GAIN TAX
FROM TOTAL PAYMENTS OF THE HOUSE SHE PAID RS.25000/-BALANCE AMOUNT PAID BY HER HUSBAND
SHE ALSO ACQUIRE A LAND FOR RS.50000/-IN LAST TEN YEARS FROM HER PIN MONEY AND SOLD DURING THE YEAR FOR RS.1400000/-
FROM THIS AMOUNT SHE GIVE RS 800000/- TO HIS SON FOR PURCHASE OF NEW HOUSE
WHETHER RS.800000/- PAID TO SON IS EXEMPT FROM CAPITAL GAIN TAX
10 March 2008
On what grounds u say that Rs.800000/- should be exempt.
11 March 2008
NO THE PROFIT OF RS. 1350000/- IS TAXABLE IN HAND OF LADY UNDER CAPITAL GAIN
11 March 2008
Long term capital gain on sale of her Land by the lady is assessable in her hands.
Exemption for capital gain is not available for loans given to son or others out of the capital gain
Exemption for capital gain is not available for loans given to son or others out of the capital gain
11 March 2008
capital gain tax will be applicable if the property is not rural agricultural land. in present case it is house property and liable for full capital gains tax.
to take exemption of section 54 or 54F, one has to keep it in capital gain account before due date of return filing.
then within time limits specified thereunder, go for eligible investments.
show the capital gain as well as exemption claimed in the return of year in which there is capital gain .
in case any property has been inherited the cost to the previous owner (person from whom inherited ) would be the cost of acquisition .
However, if the property has been acquired by the previous owner before April 1, 1981, then the Fair Market Value (market price) as on this date needs to be considered.
What if the FMV is higher or lower than the original cost? Then the higher figure is taken into account.
SOURCE:www.in.rediff.com
loan to son will not bring any exemption from capital gain.
as said above if the capital gains amount is kept in a capital gains account till return is filed and specified investments are made within stipulated period ( 2 years for buying a house or 3 years for constructing a house ),or capital gains are invested in SPECIFIED bonds LIKE NABARD ETC... THEN ONLY CAPITAL GAINS TAX CAN BE AVOIDED.
R.V.RAO
to take exemption of section 54 or 54F, one has to keep it in capital gain account before due date of return filing.
then within time limits specified thereunder, go for eligible investments.
show the capital gain as well as exemption claimed in the return of year in which there is capital gain .
in case any property has been inherited the cost to the previous owner (person from whom inherited ) would be the cost of acquisition .
However, if the property has been acquired by the previous owner before April 1, 1981, then the Fair Market Value (market price) as on this date needs to be considered.
What if the FMV is higher or lower than the original cost? Then the higher figure is taken into account.
SOURCE:www.in.rediff.com
loan to son will not bring any exemption from capital gain.
as said above if the capital gains amount is kept in a capital gains account till return is filed and specified investments are made within stipulated period ( 2 years for buying a house or 3 years for constructing a house ),or capital gains are invested in SPECIFIED bonds LIKE NABARD ETC... THEN ONLY CAPITAL GAINS TAX CAN BE AVOIDED.
R.V.RAO
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