How to save Tax ?
This query is : Resolved
24 May 2010
X has a piece of land gifted to him by his father ,
1) Sale Price - Rs 55 Lakhs (11,000 SqFt x Rs 550/Sqft)
2) Stamp Duty per Sqft Rate - Rs 350
3)Purchase price - Rs 5,000 in 1967
4) Brokerage - Rs 50,000
5) Cost of improvement - No documents available for the servant quaters made in Year 1997.
X wants to keep his tax liability minimum without exercising the options under Sec 54.
Also when the land was purchased it was under rural area but with passage of time got included in the city .
Will it attract Capital Gain.
Regards
1) Sale Price - Rs 55 Lakhs (11,000 SqFt x Rs 550/Sqft)
2) Stamp Duty per Sqft Rate - Rs 350
3)Purchase price - Rs 5,000 in 1967
4) Brokerage - Rs 50,000
5) Cost of improvement - No documents available for the servant quaters made in Year 1997.
X wants to keep his tax liability minimum without exercising the options under Sec 54.
Also when the land was purchased it was under rural area but with passage of time got included in the city .
Will it attract Capital Gain.
Regards
CA Kalpesh Gokani
(Expert)
30 June 2010
Yes, it will attract capital gain. without exercising options u/s 54, its not possible to minimise tax liability. Kindly note that date of transfer of land as a gift will be considered as date of acquisiton for Mr X not date on which land was purchased his father. You can take Fair Market Value as on 1st April, 1981 as a cost of acquisition of land.
jegannath G
(Expert)
16 July 2010
Yes it is capital gain. She / he can reduce the capital gains by considering section 112 route
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