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This discussion clarifies the calculation of Long Term Capital Gains (LTCG) tax on a property sale. The initial calculation appears correct, and the mother is liable for the tax as the sole owner. To save tax, investing the capital gain amount in a new house within three years or in capital gains bonds before June 2023 can be effective. Capital gains bonds have a 5-year lock-in period, while property investment under Section 54 has a 3-year lock-in.

Sachin Kumar

Sachin Kumar (Querist)

05 May 2023 We are family of 3 brothers and mother. My father (expired in February 2017) purchased one flat in June 2016 and after death of father , 3 brothers gifted their portion to mother via gift deed and flat got transferred in my mothers name. My mother , 58 yrs , has sold a society flat in December 2022 for 35 lacs. Purchase Price was 20 lacs , stamp duty 1.4 Lacs , registration fees 10K. Long term capital gain is coming as Rs. 804356 (35 lacs - 21.50 lacs/264*331).

__the calculation of capital gain is correct ?

__ we want to save long term capital gain , basic exemption limit for FY 2022-23 is Rs. 2.5 Lakh , balance Rs 554356 if we invest in capital gain bond , the we will be able to save capital gain tax ?

__does capital gain is applicable in this case as flat got transferred in my mother name from father ?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

05 May 2023 1. Yes. correct
2. Yes. eligible if invested before June, 2023.
3. Yes, as mother is 100% owner of the flat when sold.

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Sachin Kumar

Sachin Kumar (Querist)

05 May 2023 @Dhirajlal Sir,

1.... capital gain is calculated at flat rate @20% , amount of deduction under 80C , 80D cannot be reduced from capital gain income ?
2.....can we withdraw amount before maturity which is invested in capital gain bond ?

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Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

05 May 2023 1. You are absolutely correct. Only long term loss from any other asset can be set off with the LTCG.
2. No, lock in period of 5 years. Alternatively, it can be invested u/s. 54 for 3 years lock in period.

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Sachin Kumar

Sachin Kumar (Querist)

05 May 2023 sir , I did not get , how amount can be invested in capital gain bonds for 3 yrs under section 54 ?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

05 May 2023 Section 54 is investment in house property.
Investment in house property for amount equal or greater than LTCG for 3 years is eligible for the deduction. Be it with any other co-owner ...

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Sachin Kumar

Sachin Kumar (Querist)

06 May 2023 I donot want to do investment in house property , I want to purchase capital gain bond , please suggest some private broker through I can purchase capital gain bond ?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

06 May 2023 https://profitsolo.com/nhai-capital-gain-bonds-application-form-nhai-capital-gain-bonds-interest-rate-online/#:~:text=How%20to%20Buy%20NHAI%20Capital%20Gain%20Bonds%20Online%3F,hold%20bonds%20in...%20Document%20Upload%20You%20can%20

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