Capital gains

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 August 2011 I SOLD THE IMMOVABLE PROPERTY ON 08/07/2011 FOR A SUM OF RS.14,50,000=00. THE PROPERTY IS AN ANCESTRAL PROPERTY AND IT IS OLD ONE CONSTRUCTED ABOUT 60 YEARS BACK. NOW I DEPOSITED A SUM OF RS.12,00,000=00 IN SCHEDULE BANK. TO GET AN EXEMPTION OF CAPITAL GAINS, TO WHAT EXTENT AND WHERE TO INVEST.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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02 August 2011 You have to obtain the valuation of property from an approved valuer as on 01.04.1981 .
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The asset is Long Term Capital Asset and you have to find out its indexed cost of acquisition.

Here indexation will be done in respect to the year in which you have become the owner.

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The Positive Difference of 14,50,000 and Indexed Cost of Acquisition will be the capital gain amount.

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In case the property sold is Residential Property, you have to invest the amount of Capital Gains only. If it is other than
Residential you have to invest the entire sales consideration for getting full exemption.

Partial Exemption can also be claimed by investing lesser amount. But in that case you would have to pay tax @ 20% on the remaining taxable gains.
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For the time being , you can keep the money in Capital Gains Account with a nationalised bank latest by the due date of your return filing for AY 2012-13.

However, if you invest such amount in Residential house you can claim exemption by following certain conditions.

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