18 August 2012
A Lady sold her main residence in 2009 for Rs. 4,00,000/- and during the same year invested Rs. 12,00,000/- for purchasing a new flat which is still under construction. The lady is a house wife. Whether she will be liable to pay any Capital Gains Tax and if so how much? Whether basic exemption and other reliefs available in the income tax act are considered while calculating Capital Gains Tax?
18 August 2012
Dear Sir, First find out the amount of Capital Gain from the transaction. The Capital Gain Tax is chargeable with special rates and hence the basic exemption under Income Tax Act, 1961 is not available.
18 August 2012
there would be no capital gains if the amount of capital gain is invested in another new house before the due date of filing the return. only condition is that the house under construction should be completed before 3 years
As per section 112, in case of residents, basic exemption can be claimed from Long term Capital Gain if the person does not have any other souce of income or if the other source of income is less than basic exemption
However, there would be no deduction under chapter VIA ie 80C, 80D etc
18 August 2012
Gains or profit on the disposal of some assets are specifically exempted from Capital Gains Tax, which inter-alia include:
Gains on the disposal of property owned by a person (house or apartment) which was occupied by him or by his dependent relative as a sole or main residence vide section 54.
The Board has clarified that the above exemption is available in respect of self-occupied residential property,even if income from such property has been computed as 'nil' vide Circular No.538 Dated 13/7/1989 issued by the C.B.D.T.
In view of the above,I think in the instant case ,lady will not be liable to pay any CGT.
CAclubindia
