capital gains

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Querist : Anonymous

Querist : Anonymous (Querist)

23 August 2010 I have 2 questions regarding capital gains.

1. where existing flat is sold for 10 lac and new flat purchased for 8 lacs.

2. If the 2 lacs is used for building another a house, is it taxable.

Aditya Maheshwari

Aditya Maheshwari (Expert)

23 August 2010 What is the cost of the old flat sold?

Exemption available for one house property u/s 54 if gains on sale of residential flat invested in buying new residential property.

Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2010 Sir,

I have 2 questions.

1. if an old flat is sold for 20 lacs, and a new flat is purchased for 15 lacs, what happens to the balance 5 lacs.

2. if this 5 lacs is used for renovation/construction of another house, what will be the taxable capital gains

CA SMR

CA SMR (Expert)

24 August 2010 If the CG arising on selling the old flat exceeds the value of the new flat then the net amount becomes taxable.

Aditya Maheshwari

Aditya Maheshwari (Expert)

24 August 2010 If your indexed cost of acquisition is 5 lakhs and then flat is sold for 20 lakhs then LTCG is Rs. 15 lakhs and which is invested on purchase of house property then exemption from LTCG u/s 54 Rs. 15 lakhs and hence net capital gain zero.

2. No exemption from capital gains if gains not invested to purchase new house property.

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