Long term Capital Gain

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This query is : Resolved

Rajiv (Querist)

21 May 2011 Hello,

I got one comercial cum residential property via registered will from my grand mother in 1974 which was joint with my cousins. we made registired partition deed in 1999 and seperate it as per mutual understanding.

Recently I sold it @ 60 Lac to one person. I bought one residential flat in the same city @ 20 Lac. Kindly guide me how much capital gain tax I am liable to pay? or what is good option to save long term capital gain tax.

Tanx

Rajesh

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

21 May 2011 You have to get valuation of the share which you have received in the property.
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The valuation as on 1.4.1981 is required in this case which is going to be cost of acquisition.
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For calculating Capital Gains the value as on 1.4.1981 has to be indexed proportionately with the current years Cost Inflation Index.
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Capital Gains = 60,00,000- Indexed Cost of Acquisition.
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If the property which you have sold, was residential house and not a commercial property, you would have to invest
the amount of Capital Gains only, in a residential house.
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In case the property is commercial
you have to invest sales consideration
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Tax on Capital Gains is @ 20%
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You can invest the balance taxable amount in NHAI or REC Capital Gain Bonds.

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