Long term capital gain tax

25 June 2019
Dear Sir,
My mother-in-law want to sell the land purchased in the year 1983 with a cost around Rs.25000, the present Registered value of the land is Rs.40 lakhs, Brokerage of Rs.100000 on sale to be paid, she is a senior citizen, she had paid stamp duty and Maintenance charges,EC Charges etc. for the property around Rs. 25000, Kindly guide which on is beneficial to her whether With Indexation or without Indexation. Kindly guide how much capital gain tax she has to pay under both the categories and also guide for tax savings by any investments.

jinendra jain (Expert)
25 June 2019
1-April- 2001 ki fair market value kya thi property ki..

GANESAN S (Querist)
25 June 2019
Thanks for your reply
Fair Market value means 'Property Market Value' or 'Property Registration value'
where we can find the Fair Market Value of the property.
Whether it is different from Indexation.
Please also guide, she has to file return after paying LTCG Tax.

jinendra jain (Expert)
25 June 2019
Indexation now apply from 2001 instead of 1981 of earlier provision, If value as per registrar valuation available then take that value otherwise property market value, on that amount Indexation apply.

GANESAN S (Querist)
25 June 2019
Thanks Mr.Jinendra
Whether we have to take report / certificate from approved valuer / surveyor about the property market value.
How to produce value assessed document, if it is required by Income Tax officials.
If Indexation not done, whether the seller can pay 10% as Long Term Capital Gain Tax with the Capital Gain calculated.
Please also confirm for Land sold under LTCG attracts 20% under Indexation and 10% without Indexation.
For eg:
Market value as on 2001 is Rs. 500000
Indexation 500000*280/100 = Rs.1400000
( CII for 2019-20 not given)
Sale value as on June 2019 Rs. 4000000
Less Maintenance, Brokerage, Stamp duty Rs. 100000
Long Term Capital Gain ( 4000000-100000-1400000 ) Rs. 2500000
LTCG Tax @ 20% is Rs. 500000. Please also confirm the above illustration in correct.

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