Capital gain wrt sale of flats

Tax queries 559 views 5 replies

Abhay Tibrewala

Director

31 Points Posted on 31 December 2014

Dear Sir/Mam, 31.12.2014

Greetings !!

We have flats in Registered Pvt. Ltd. Company's Name and we are the directors in the company. We have been taking depreciation in the above flats every year (5%)

We are planning to sell our flats (which have been purchased about 20 yrs back) , we would like to know the following :

1. What are the capital gains tax to be beared by us ?

2. If we want to sell the above flats and invest part/whole consideration into buying new flats, please mention the tax liability we have to bear ?

3. In how much time we have to make the investment after the sale of flats?

Hope you will be able to answer the above query

Thanks

Regards,

Abhay

Replies (5)

giri

Student CA Final

32 Points Posted on 31 December 2014

you haven't mentioned the cost of Acquistion of the Asset.. without the knowledge of which the answers may be subject to deviations

Abhay Tibrewala

Director

31 Points Posted on 31 December 2014

Dear Sir,

Thanks for your reply

Cost of Acquisition of the asset is Rs. 94,000.

Market value of the asset = Rs. 10,000,000 approx.

Thanks

-A

AKSHAY R SHET

FINANCE

48 Points Posted on 01 January 2015

if ur taking dep on that flat u will be having stcg of 1 crore. invest in new house within 3 years . till that park funds in cap gain scheme

Abhay Tibrewala

Director

31 Points Posted on 02 January 2015

Dear Sir,

Thanks for your reply. We want to clarify that we will be purchasing the flat first with our own money or by loan.

After the possession of the new flat, we will be selling our old flat, since we dont have any other flat to stay.

Kindly advise, how to avoid the capital gain tax.

Thanking you

Regards,

-A

CA Ankit Mittal

Charterd Accountant

118 Points Posted on 02 January 2015

Even if the asset is a depreciable asset, you can take exemption after buying new flat (must be used for residential purposes and hence no depreciation would be chargeable on the new flat purchased) under section 54F.

There are several judgements in the favor of assessee on this matter

LTCG will be (Sale Consideration) minus (Value of the depreciable Block as on date)

Benefit of Indexation may not be available