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capital gains tax

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Querist : Anonymous

Querist : Anonymous (Querist)

28 August 2010 A lady aged 50,having no other income,disposed off a piece of land in a city in Aug.2010 for Rs.315000.This was acquired by her in Nov.1988 for Rs.9330.

What is the capital gains tax payable?

Will investment in PPF/ELSS/INFRA BONDS MAKE ANY DIFFERENCE.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 August 2010 Cost 9300/-
Indexed cost 9300X 711/161 = 41070/
Capital gains 315000/- minus 41070/- = 273930/-
Basic exemption 190000/-
Taxable capital gains 83930/-
Income tax @20% 16786/-

The investments referred will not qualify for exemption. However, if the capital gain (273930/-) is invested in capital gains bonds of REC bonds or NHAI bonds exemption will be available subject to the conditions mentioned in section 54EC of the Income tax Act,1961.

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