LTCG from sale of a Flat

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Chandrika Subramaniyan (Querist)
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13 February 2011 Dear Experts,

I would be grateful for your guidance and advice on following.

I am in the process of selling my 35 year old flat in Chennai and the sale price agreed upon is 5200000 and all in white.

I understand that buyer is proposing to give me 2 DDs for the sale, for his benifit probably to reduce registration fees etc, one for the land & propertyt and the other I assume for furnitures which is part of the flat , and in two sale deeds and the segregation of amounts will be known on Mon or Tue 14/15 Feb 11. I may have to meet the buyer on Thursday with my lawyer who is common to me and the buyer......to agree to this.Before I sign this I would like to know whether this is legal for IT Purpose.

And I intend accounting for the sale in my IT returns for the full amount after calculating the depreciation and LTCG etc and plan to invest amount arrived at in LTCG Tax Free NHAI Bonds .

Thank You
Sincerely
Chandrika

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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13 February 2011 Furniture & Fixtures are personal assets and are not treated Capital Assets.
Since these are not meant for carrying on any business or profession no depreciation is neither required to claim not it is allowable U/s 32.
In my opinion amount received from sale of Furniture will be treated as Capital Receipt in your hand no Gains Tax is required to be computed.
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For the House, valuation of 1.4.1981 from approved valuer is required. Suppose value of this house on 01.01.1981 is 5,00,000/
its indexed cost of acquisition is taken
for Computation of Capital Gains. You have to multiply the value as on 01.04.1981 by 7.11, so 35,55,000/ will be taken as Indexed Cost of Acquisition.
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Suppose you receive Rs 40.00 lacs towards
HP then 40-35.55 = 4.45 will be the capital gain
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You may invest the capital gains in NHAI Bonds for claiming exemption.

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