Capital Gain Tax - To be paid Or Not?

Tax queries 1000 views 11 replies
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JOB
88 Points Joined August 2009

Please reply the following queries on urgent basis regarding the Long term capital Gain on property.

My father constructed a house in the year 1991 on the land purchased by him in the same year. Now he want to sale this house and buy another house. Please clarify whether he has to pay the LTCG. As the cost of new house (which is proposed to be purchased) is less then the cost of the old house (Which is to be sold).

Consider the following points and reply accordingly.

1. He does not have taxable income beyond the exempt limit therefore he is not submitting the Itax Return.

2. He is retired person with no considerable income.

3. He does not have PAN number.

4. His age is about 72 years.

5. He is the legal owner of the house to be sold.

6. He want to buy the new house in his own name.

Thanks in advance.

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On 13 November 2009 at 15:35 Report
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CA M. com
10823 Points Joined November 2008

If there is CAPITAL GAIN (COST OF NEW HOUSE IS LESS THAN SELLING PRICE OF OLD HOUSE)., then he's supposed to  pay tax. I think, he has to get PAN number first., for this

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On 13 November 2009 at 15:49
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professional
93 Points Joined April 2008

wewell he will get da exemption of capital gain upto the cost of new house

ie.if his capital gain is rs 2000000 and cost of new house is 1700000...then he ll get exemption of 1700000

plus 150000 as hes not having any any other income.....

he ll get da exemption upto da non taxable slab tooo.......

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On 13 November 2009 at 21:30
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professional
93 Points Joined April 2008

so calculate accordingly...

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On 13 November 2009 at 21:37
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Student
42 Points Joined August 2009

Firstly, to pay LTCG, he has to file his returns. For which a PAN card is required.

Secondly, deduct the indexed cost of acquisiton (purchase price takin due consideration for inflation)  and the cost of the new house (deduction u/s 54) from the net sale consideration. Balance is payable as LTCG.

Thirdly, since he is 72 years of age he wud be exempt upto Rs.225000/-

I think this should help!!

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On 13 November 2009 at 22:58
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Article Assisstant
58 Points Joined July 2009
Originally posted by :Kr R
" Please reply the following queries on urgent basis regarding the Long term capital Gain on property.
My father constructed a house in the year 1991 on the land purchased by him in the same year. Now he want to sale this house and buy another house. Please clarify whether he has to pay the LTCG. As the cost of new house (which is proposed to be purchased) is less then the cost of the old house (Which is to be sold).
Consider the following points and reply accordingly.
1. He does not have taxable income beyond the exempt limit therefore he is not submitting the Itax Return.
2. He is retired person with no considerable income.
3. He does not have PAN number.
4. His age is about 72 years.
5. He is the legal owner of the house to be sold.
6. He want to buy the new house in his own name.
Thanks in advance.		 "

Sir,

      First, compute capital gain by multiplying cost of acquisition and cost of cosnstruction with  632 (index of FY  2009-2010) and divide the same by 199 (index of FY  1991 -1992), and The arrived amount has to be deducted with the old house sale consideration. If the amount of capital gain is less than cost of acquisition of new house no need to pay tax, because by claiming exemption u/s.54. if it is more, difference between capital gain and cost of acquistion has to amitted as an income. If capital gain plus your father's other income exceeds Rs.240,000 you have to pay tax otherwise no need to pay tax

Regards

D.Manikandan

    

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On 14 November 2009 at 12:27
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CA
1479 Points Joined November 2007
Originally posted by :D.Manikandan
"


Originally posted by :Kr R


"
Please reply the following queries on urgent basis regarding the Long term capital Gain on property.
My father constructed a house in the year 1991 on the land purchased by him in the same year. Now he want to sale this house and buy another house. Please clarify whether he has to pay the LTCG. As the cost of new house (which is proposed to be purchased) is less then the cost of the old house (Which is to be sold).
Consider the following points and reply accordingly.
1. He does not have taxable income beyond the exempt limit therefore he is not submitting the Itax Return.
2. He is retired person with no considerable income.
3. He does not have PAN number.
4. His age is about 72 years.
5. He is the legal owner of the house to be sold.
6. He want to buy the new house in his own name.
Thanks in advance.
"



Sir,
      First, compute capital gain by multiplying cost of acquisition and cost of cosnstruction with  632 (index of FY  2009-2010) and divide the same by 199 (index of FY  1991 -1992), and The arrived amount has to be deducted with the old house sale consideration. If the amount of capital gain is less than cost of acquisition of new house no need to pay tax, because by claiming exemption u/s.54. if it is more, difference between capital gain and cost of acquistion has to amitted as an income. If capital gain plus your father's other income exceeds Rs.240,000 you have to pay tax otherwise no need to pay tax
Regards
D.Manikandan
    		 "


 

Agree with absolutely correct!!!!!!!!

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On 28 November 2009 at 16:51
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ASST FINANCE MANAGER
45 Points Joined September 2009

I purchared a land from housing borad for Rs 2lakh & spent rs 528000 as per the following details:

on 01.10.99  Rs 87500

1.02.00   Rs 87500

on 01.11.00  rs 87500

on 1.03.01  rs 52000

on 01.08.01 rs 35000

on 01.04.01 rs 50000

on 01.05.01 rs 129200

further I sold this house on 01.07.09 for rs 1700000.00

buyer got it registered and paid stampduty on 2358000 as per prevailing circle rate.

i further paid rs 26000 towards water tax before transfer.

on recipt of rs 1700000    I repaid a housing loan of Rs 500000 taken in the name of my wife.

pl let us know the tax liability.

how it can saved?

 

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On 30 November 2009 at 20:43
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ASST FINANCE MANAGER
45 Points Joined September 2009

I purchared a land from housing borad for Rs 2lakh & spent rs 528000 as per the following details:

on 01.10.99  Rs 87500

1.02.00   Rs 87500

on 01.11.00  rs 87500

on 1.03.01  rs 52000

on 01.08.01 rs 35000

on 01.04.01 rs 50000

on 01.05.01 rs 129200

further I sold this house on 01.07.09 for rs 1700000.00

buyer got it registered and paid stampduty on 2358000 as per prevailing circle rate.

i further paid rs 26000 towards water tax before transfer.

on recipt of rs 1700000    I repaid a housing loan of Rs 500000 taken in the name of my wife.

pl let us know the tax liability.

how it can saved?

 

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On 30 November 2009 at 20:44
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ASST FINANCE MANAGER
45 Points Joined September 2009

 I   purchared a land from housing borad for Rs 2lakh & spent rs 528000 as per the following details:

on 01.10.99  Rs 87500

1.02.00   Rs 87500

on 01.11.00  rs 87500

on 1.03.01  rs 52000

on 01.08.01 rs 35000

on 01.04.01 rs 50000

on 01.05.01 rs 129200

further I sold this house on 01.07.09 for rs 1700000.00

buyer got it registered and paid stampduty on 2358000 as per prevailing circle rate.

i further paid rs 26000 towards water tax before transfer.

on recipt of rs 1700000    I repaid a housing loan of Rs 500000 taken in the name of my wife.

pl let us know the tax liability. whether tax to be computed on amount actully received or the amount on which registration of  property got done in this case which is higher ?

how it can  be saved?

can any one answer ?

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On 03 December 2009 at 20:42
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ASST FINANCE MANAGER
45 Points Joined September 2009
Originally posted by :saurabh
"

I purchared a land from housing borad for Rs 2lakh & spent rs 528000 as per the following details:
on 01.10.99  Rs 87500
1.02.00   Rs 87500
on 01.11.00  rs 87500
on 1.03.01  rs 52000
on 01.08.01 rs 35000
on 01.04.01 rs 50000
on 01.05.01 rs 129200
further I sold this house on 01.07.09 for rs 1700000.00
buyer got it registered and paid stampduty on 2358000 as per prevailing circle rate.
i further paid rs 26000 towards water tax before transfer.
on recipt of rs 1700000    I repaid a housing loan of Rs 500000 taken in the name of my wife. & the balance amount is deposited in capital gain account scheme of a public sector bank.

whether interst accreud on such scheme is subject to tax?

On maturity tax implication if any
pl let us know the tax liability.
how it can  saved?
 

 "


 

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On 03 December 2009 at 20:52
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ASST FINANCE MANAGER
45 Points Joined September 2009
Originally posted by :D н ! я σ √
"

If there is CAPITAL GAIN (COST OF NEW HOUSE IS LESS THAN SELLING PRICE OF OLD HOUSE)., then he's supposed to  pay tax. I think, he has to get PAN number first., for this

 

pl workout the capital gain considering no other source of income in 08-09

 "


 

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On 06 December 2009 at 19:50


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