Capital gain and advance tax issue

Tax planning 4946 views 10 replies
Guest

Hello Friends.

I found really interesting n Important Tax planning case for Capital gain advance tax and Interest u/s 234.

My Principal asked me to Calculate Advance Tax payment details of one Individual.

 Facts are:
1.Plot of Land not agricultural sold:Rs 10000000/-On 5 June 12
   Plot of Land Purchased: Rs.1399711/-     On 17 Oct. 07

            I calculated LTCG by taking 2011-12 (assuming for near about) n Got LTCG rs.         8008586/-.

2.    Plot of Land sold:           Rs 5000000/-  On 8 May 12
Plot of Land Purchased:       Rs.194400/-     On 11 jan. 2008

I calculated LTCG by taking 2011-12 (assuming for near about) n Got LTCG rs. 4723042/-.

Total LTCG is 12728900 and tax on that is 2580950

My Q is what is CII for 2012-13?

And How much advance tax installments and when client should pay to avoid Interest penalty  U/S 234.
and how interest be there as on 31/3/13 if advance tax not paid?

Please suggest me n let  discuss on Tax planning. Thanks in advance

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On 07 July 2012 at 11:15 Report
Replies (10)
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studying final
830 Points Joined December 2007

hi

i think CII for the FY 2012-13 is not released yet.... may be in aug

1 Reply
On 07 July 2012 at 12:04
Guest

Hi kavitha

Thnx for ur suggestion.

can u please tell me How to calculate Interest u/s 234.

Suppose tax are 2400000/- n till 31 march individual client has not paid any advance tax.

waiting for ur help.

 

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On 07 July 2012 at 12:10
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B.com ACA
5923 Points Joined December 2011

CII for FY 2012-13 has not been announced yet.

Assuming your client is non-corporate.

Adv tax for 1st instalment(before 15th Sept 2012)= 30% of Tax payable

Adv Tax for 2nd instalment(before 15th dec,2012) =30% of Tax Payable

 

Adv Tax for 3rd instalment(15th mar,2013) =40% of Tax Payable

If default is ,ade in paying Advance tax then interest on late payment will be attrracted u/s 234B and 234C
 
Int u/s 234 C is 1% p.m on unpaid Adv tax not paid for every month or part from Apr. 2013
 
Int u/s 234 B is  to be calculated as under-
 on 1 st instal = Total Adv tax attributable to 1st instal *3% p.a
  on 2nd instal=( Total Adv tax attribuatable till 2 nd instal - Any Adv tax paid till date)*3% p.a
   on 3rd instal= ( Total Adv tax attribuatable till 3rd instal - Any Adv tax paid till date)*1% p.a
 
 
If any mistake pls notify. 
1 Reply
On 07 July 2012 at 12:11
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Sr. Executive - Finance & Accounts
1732 Points Joined February 2011

Why do you want to pay such a hefty amount of tax.

Invest the proceeds in house property, 54EC bonds to avoid tax.

Also, for tax payments of an individual, advance tax shall be paid 

15th September: 30%

15th December: 60%

15th March: 100%

If any instalments are not me, then intt @ 1% from the date of deficit till date of payment shall be charged.

And for CII of 12-13, it is expected to be 860...

Regards

1 Reply
On 07 July 2012 at 12:22
Guest

Saurabh

ur working is absolutely correct but u wrong quoted Sec.234B instead of Sec234C n 234C instead of 234B

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On 07 July 2012 at 12:22
Guest

Dear Prateek

Client already has one house already  n in investing Bonds interese rate is only 4-5%  for 3 years.

so he does not want to block his liquidity  which is approx 1.25cr.

thats why i am concerning to best solution ..

please correct me if i am wrong

 

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On 07 July 2012 at 12:27
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studying final
830 Points Joined December 2007

Non corporate assessee-234C

advance tax paid on or before sep'15th is less than 30% --- 1% per month per 3 months

on or before dec'15th less than 60%---1% per month per 3 months

on or before Mar'15th less than 100%---same as above

advance tax paid but less than 90% of the assessed tax interest @ 1% p.m /part of month under sec 234B

if failed to pay advance tax ,on whole amount 1% p.m/part of month interest is appliacble

1 Reply
On 07 July 2012 at 12:31
Guest

Correct me if i am Wrong

suppose Tax liability is 2400000 including education cess n I have not paid any Advance Tax till 31 march then

Interest

u/s 234 C(I)     Rs. 720000 x 3 x 1% =21600
 
 

  u/s 234 C(II)    Rs. 1440000x 3 x 1%=43200
 

  u/s 234 C(III)   Rs. 2400000 x 1 x 1%=24000
 
and Total Tax 240000 plus interest 88800/-  =2488800/-
 
and after that till 31july Client has to bear interset @ 1%  P.M. on 2400000/- if not pay Advance tax.
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On 07 July 2012 at 12:44
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studying final
830 Points Joined December 2007

s correct

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On 07 July 2012 at 13:04
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Auditor Article Assistant
816 Points Joined May 2011

Invest the entire amount in Agriculture land take full exemption sec 54b then sold entire land which will be fuly exempt from tax

1 Reply
On 07 July 2012 at 13:30


CCI Pro

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