Capital gains

Part 1-  First of all I'd like to say kindly don’t be confused between construction or purchase , Although Builder has done the construction and other related part  so you're simple purchasing a new flat & yes it will come under purpose of  capital gains

2.  yes you’re eligible of capital gains exemption as you ‘re selling old flat and at the time you’re buying new flat .

Let’s calculate your capital gain tax liability

CII index for year 1983-84(assume before April 1984_ which is - 116

CII index for year 2012-13(As Possession in Nov ’12) which is – 852

CII- Cost Inflation index

So your CII index factor will be 852/116= 7.32

So according to CII factor base price of your old flat will be Rs 1.2 Lacs * 7.32 = Approx Rs 8.81 Lacs

You sold it for Rs 44 lacs  your capital gain will be approx = 44-8.81= 35.18 lacs

Now you ‘are responsible for paying tax on 35.18 Lacs

If you’re not reinvesting money in property then you ’re liable to pay tax @ 20 %  

As you’re again reinvesting this money in buying new flat

So if new flat price > capital gains then you’re completely exempted under u/s 54 .

One More thing I ‘l like to add here as you lived for a quite a long time in your old flat so it is quite possible that you did some modification in your old flat like some extra construction or in repair work  etc.

Then you can also add this expenses while you‘re calculating capital gains

Suppose you have invested Rs 1 lac in repair work in year 1994

Then CII for year 1993-94 which is – 244

Again CII for year 2012-13-852

CII Factor – 852/244 =3.49

Again Deviated cost will be 1 * 3.49 =3.49 Lacs

Now in this case you capital gains will be

44- (8.81+3.49)= 31.7 Lacs Approx

Read these articles for more clarification

https://www.simpletaxindia.net/2011/11/capital-gain-exemption-5454b54ec54f-at.html

https://www.charteredclub.com/section-54/

Mr. Goyal,

I have left  an important inf on the above subject. I took home loan for my new flat and the balance as on date is 31 lakhs. I want to pay this amount to the bank ane close the loan account. In this context will I be eligible to claim for cg exemption.

Thanks for ur prompt early for my previous msg

you will get only deduction u/s 80c for repayment.otherwise no exemption for capital gain because capital gain exemption requires investment of sale proceed or gain in new purchase or construction and does not include repayment of loan