Short Term Capital Gain

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alaknanda sen (Querist)
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03 September 2007 My friend has got a flat which she purchased 4 months back.She wants to sell it off and wants to purchase a new one. what will be the tax implication of this transaction? How much tax she has to pay if she buys another flat with the sale consideration?

alaknanda sen

alaknanda sen (Querist)
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03 September 2007 Thanks

CMA Gul S

CMA Gul S (Expert)
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03 September 2007 She will have to pay the Capital Gain Tax on under the Head SHORT TERM CAPITAL GAIN.

This STCG would be a part of the Gross total income and the tax rate would vary according to the other income that is added to the Gross Total Income.

For Women
0 - 1,35,000 Nil
1,35,001 - 1,50,000 10%
1,50,001 - 2,50,000 20%
More than 2,50,001 30%

The gain would be the Sales consideration - the Purchase value.

alaknanda sen

alaknanda sen (Querist)
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07 September 2007 Thanks.But if she buys another flat in the same financial year will she get any tax benefit?

miraj d shah

miraj d shah (Expert)
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09 September 2007 In respect to the profit on sale of the flat the same is treated as Short Term Capital Gains (as the flat was not held for more than 3 years) thus the same is to be taxed at the rate explained by Mr Gul.

The benefit of investment in new property as per sec 54 /54F is available only on sale of a long term capital asset. In your case as explained the asset is short term asset hence no exemption is available on purchase of new property.