Tax implication of selling self owned properties
Querist : Anonymous
and 2009-10
Now I have moved to a different city and want to sell the property. My questions are as follows:
1. What are the long term capital gains tax implications in selling the property now? How does indexation work?
2. If I take the gains of the sell and start paying for another property that I have booked over the next 1 year then do I owe any capital gains tax?
3. What are the implications of the tax benefits I have enjoyed as a self occupied property? Do I have to give back the tax arising from the income loss?
4. Can some one help me with the rough calculations around this?
1. For Long term capital asset as per Section 2(29) you need to sell it atleast after 3 years except shares, mutual funds etc. So if you sold the property after 3 years then Indexation will be allowed.
2. As per Section 54 if you purchase another residential house 1 year before or 2 years after sale or construction is completed within 3 years then exemption will be allowed. Amount of exemption will be equal to the amount of investment in new house and balance capital gain will be taxed u/s 45(1).
3. All those deduction which you have taken u/s 24(b) or 80C earlier will not be considered here.
4. For rough calculation suppose the Sale consideration is 80L and ICOA is 60L. Then if you invest Rs. 20L or more than there will be no capital gain.
Querist : Anonymous
Someone told me that there was a 5 year limit on this. Appreciate your confirmation
To the best of my knowledge 5 years limit is for pre incorporation expenses and once you sell the property you will not be able to get the benefit of it.
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