Capital Gain Tax Calculation

Tax queries 983 views 6 replies

Sandip Pandya

SELF EMPLOYED

29 Points Joined September 2009

My father had purchased a Flat in Ahmedabad in 1969-70 at Rs. 25000/-. The whole society was sold to a builder in 2007-08 and my father had got Rs. 26,50,000/-. As per the Valuation Report given by the builder prepared with the authorised valuer is showing Flat Value of Rs. 2,54,000/- as on 01-04-1981. In FY 2007-08 my father has purchased a new flat at the cost of Rs. 9,39,030/-.

Now, plz guide me what is the Capital Gain and what amout of Investment my Father has to do or if they have to pay Capital Gain Tax, what would be the amount and before which date they can deposit it.

Replies (6)

Krutesh Patel

ACA

727 Points Joined July 2009

Your cost of purchase will be replaced by fair market value as on 1 Aprl 1981 as it is higher than purchase price. You will have benefit of indexation. Indexed cost will be 254000*5.82=.1478280. Hence long term capital gain will be Rs.11,71,720. You have invested Rs. 9,39,030 in new house. Hence you should invest rs. 231790 in 3 years bonds of REC of NHAI to exempt entire gain.

C.Balaji

Learner

1867 Points Joined October 2008

hi, the CII for F.y.07-08 = 551 and not 582.. so the calculation would be like this

sale consideration - 26,50,000

ICOA - 254000*551/100 = 1399540

LTCG - 12,50,460

EXEMPT 54 - 9,39,030

therefore, LTCG - 3,11,430

you pay CG tax or see whether your father has made any improvement on the flat before sale.... you can claim Indexed cost of improvement which will certainly reduce the gain.. i don't think you can get 54ec exemption because it should be done within 6months from the date of sale...

VARUN

PCC STUDENT

523 Points Joined April 2009

agree with what C.Balaji has said .... Further, in order to save tax, as per sec. 54, u can construct one or more house upto three years from the date of sale then the amount incurred will be exempt.

C.Balaji

Learner

1867 Points Joined October 2008

54 - i think the Capital Gain amount can be invested only in one res. house and not more than one res. house...

Juzer Sadikot

CA - innovative solutions for Imports an

1309 Points Joined November 2008

Dear Varun/Balaji/Krutesh,

Option of exemption under section 54/54F shall be only available if assesee excersice the option of investing such gains/proceeds by keeping such money in Capital Gain Account Scheme by latest 31st July 08.

Also, in relation of re-investment in REC or NHAI (section 54EC) it is to be excerside with in 6 months from the date of transafer.

In veiw of above, Mr. Sandip, you dad is liable to tax and need to pay tax by filing return of Income with applicable penal interest.

Thanks.

dilip

Propritor

73 Points Joined September 2009

if shares in name of Father & Mother jointly (Father is first holder) is given to son after the death of father. will the capital gain received by son will be clubbed with mother ?is this amounts to inheritance / Gift / transfer ? though LTCG is exempt U/s 10(38) and Dividend is exempt U/s 10(34) will it be clubbed with mother or assessed under son (Son is not minor) if any case law or judgement please let me know