Capital Gain Tax liability on sell of Shop- personal property

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This discussion clarifies Capital Gains Tax implications when selling an investment shop held for over five years. It confirms that capital gains tax is applicable and explains that the registered purchase cost (Rs. 8 lacs) will be used for calculation, with indexation benefits available. The advice strongly advises against splitting the sale amount between a sale deed and cash, recommending the full market value (Rs. 20 lacs) be declared on the sale deed. Legal expenses incurred during purchase and sale are eligible for deduction, and the tax rate for FY 2022-23 is stated as 20% after deducting the indexed cost.

Keyur

Keyur (Querist)
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12 July 2022 Dear Sir/Madam

Sir I have foll.question regarding sell of shop kept as investment since last 5 years or more-

I was earn monthly rent of my own shop and I was showed in my tax return.
I was buy this shop of Rs.8,lacs (as per sales deed, actually I was paid in total of Rs.12 lacs at that time) now today I have plan to sell this shop and its market value around 20 lacs.
I have foll. Question-
 Capital gain tax applicable on sell of shop in this year??
 How much cost of purchase i.e Rs. 8 lacs or Rs.12 lacs??
 I will have to plan to make sale deed for sell of this shop around Rs.15 lacs and remaining balance amount of Rs. 5 lacs will pay in cash by new buyer, is it possible?
 I have to make sales deed full amount of shop i.e Rs.20 lacs?
 What is sales consideration for me i.e Rs. 20 lacs or Rs.15 lacs??
 Legal expenses incurred during buy and sell of shop is eligible as expense while calculation capital gain tax??
 What is the Capital Gain Tax Rate for fy-2022-23??

Request to give answer of my all doubt at earliest

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 July 2022 1 yes capital gains tax applicable in this year.
2 8 lacs will be considered. Indexation can be applied. When you buy the shop.
3 Cash payment not possible.
4 Make sale deed for 20 lacs.
5 20 lacs.
6 Legal expenses can be claimed.
7 20% tax payable after indexed cost is deducted.

Keyur

Keyur (Querist)
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12 July 2022 Warmly thanks sir for prompt reply

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 July 2022 You are welcome.......

Keyur

Keyur (Querist)
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12 July 2022 Sir,
Suppose I have to make sales deed of Rs.15 lacs and rs.5 lacs I will taken cash and used to buy house hold items then what happened???
I will calculate capital gain tax on 15 lacs only??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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13 July 2022 Nothing will happen do as you like, if sale deed is registered for 15 lacs.

Keyur

Keyur (Querist)
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13 July 2022 Thank you sir

Wish you a very happy gurupurnima

Keyur

Keyur (Querist)
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14 July 2022 Sir,
Suppose i will make investment out of sale of shop in another shop then investment made is eligible for deduction ??

Also clarify suppose i will make investment in residential house property then deduction is available??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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14 July 2022 Investment made in other Shop is not eligible for deduction but investment in residential house is eligible for deduction.

Keyur

Keyur (Querist)
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18 July 2022 thank you sir

i got clarification

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