Capital gain on sale residential house
This query is : Resolved
Prasad A Patil
(Querist)
24 March 2018
A flat was purchased for Rs. 5,80,000 in Nov 2006 & sold for Rs. 27,50,000 in Jul 2016. A residential house was started constructing, & spent Rs. 7,15,000 in 2013-14, Rs. 15,85,000 in 2014-15, Rs. 15,00,000 in 2016-17, totalling to Rs. 38,00,000. What would be the capital gain & how much amount is taxable under "Income from Capital Gain"?
CA R SEETHARAMAN
(Expert)
25 March 2018
20% tax payable on capital gains of Rs 14,92,775.
Section 54 exemption not available on started construction of house before sale of house.
Section 54 exemption not available on started construction of house before sale of house.
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Prasad A Patil
(Querist)
25 March 2018
But in the year of sale, I have spent Rs. 15,00,000 (for which receipts are available from building contractor) against capital gain of Rs. 14,92,775. Won't I get exemption on the capital gain amount as I have spent the same for construction of my independent house (this is only residential property I have)?
Please help me to understand, how the above capital gain is calculated.
Please help me to understand, how the above capital gain is calculated.
CA R SEETHARAMAN
(Expert)
25 March 2018
You have started construction before sale of the house hence exemption not available.
Use the link to calculate capital gains.
https://www.google.co.in/url?sa=t&source=web&rct=j&url=https://finotax.com/income-tax/cgcalc&ved=2ahUKEwiE9Zmny4faAhWImpQKHbwxDlsQFjAAegQICRAB&usg=AOvVaw1XV92qekbJjLmFNML_r5Ri
Use the link to calculate capital gains.
https://www.google.co.in/url?sa=t&source=web&rct=j&url=https://finotax.com/income-tax/cgcalc&ved=2ahUKEwiE9Zmny4faAhWImpQKHbwxDlsQFjAAegQICRAB&usg=AOvVaw1XV92qekbJjLmFNML_r5Ri
Prasad A Patil
(Querist)
26 March 2018
Since, it is a residential property & a long term capital asset, Sec.54 is applicable, & it is nowhere mentioned that, the LTCG is NOT available, if the construction of new residential house is started before selling of the existing residential house, when I go through the link given by you. Though I have spent to the tune of Rs. 23,00,000 till 31.03.2016, with the help Home Loan, I am not highlighting the same. What I am focusing is, Rs.15,00,000 spent in 2016-17. Please help me to understand.
CA R SEETHARAMAN
(Expert)
26 March 2018
See the provision of section 54 only purchase is allowed prior to sale and construction allowed after sales
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