One person sold his residential House property ( 5700 sq. ft. with Bunglow) to developer for 4.25 cr., Builder offered 1 floor of the new building for Rs. 2.10 cr.
Person is sole owner of the property under consideration. He has acquired the property before 1982 for Rs. 70000.
I understand that Person can save tax by investing in prescribed securities up to 50lakhs and can opt for purchase of new property . Even after investing in both options around 1.9 cr. remains as a taxable income .
Is there any way to save tax on this income.
If person spend 30 lacks on interior of new property can he add this expenditure in the cost of acquisition of the new asset.
Suggest me the way by which person can reduce his taxable income.
16 February 2011
Under this situation you can save tax on capital gain by using section 54, 54EC and both you are using at this time.
You can purchase any other house property at this time or keep specified amount in CGAS for some time but before completion of that period you have to make investment in any residential house property otherwise that CGAS amount will also be taxable.
Rs. 30 lakh is not required in acquisition cost therefore this would not be include in Cost of Acquisition, yes you can say to builder spend that amount and pay him that amount as acquisition amount.
Further, there is no any other option(i think) in capital gain chapter but you can go for tax planning.
17 February 2011
About the purchasing more than one house property, there was one decision came from may be High court regarding on case where court allowed investment in more than one house. Case was may be in the year of 2007.....
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