Clarification required for long term capital gain

Tax queries 234 views 2 replies

Hi Experts. I would like to ask one query regarding long term capital gain.

One residential plot was allotted in year 2010 and the amount was paid in six yearly installments starting from year 2011. The amount paid to the Urban Authority was Approx Rs. 21.00 lakhs. Enhancment amount of Rs. 2.91 lakh (+ interest) yet to be paid. Now planning to sell the plot for which the enhancment amount as well as conveyence deed expenses (approx 2.00 lakh) will be borne by me. The sale proceeds would be Rs. 70.00 lakhs.

Besides this I owns a house which was bought in year 2016 (Registered deed in 2016) and also a house building loan of Rs. 50.00 lakh is outstanding as on date. The completion certificate of the house was issued in year 2019 and I am residing in that house. Now my queries are :

 

1. If I sells plot, that what type of capital gain will be levied on me i.e. STCG or LTCG (date of allotment will be considered OR date of conveyence deed will be considered?

2. If I re-pay the loan of my house with the sale proceeds of plot, Will I be exempted from paying any capital gain?

I hope I made myself clear in asking the query. All are requested to kindly advise me and also give me section(s) or citation of relevant judgments in support of their advise.

 

Thanks & Regards

 

P K Gupta

Replies (2)
1. it wud be LTCG, since plot was bought in 2010 and allotment letter granted on that date
2. you won't be exempted. you either need to purchase a residential property or invest in capital gains bonds ipto RS. 50lacs
1. Long Term Capital gain - on sale plot as date of allotment will be considered.

2. By repaying your hosing loan earlier will provide you no relief from tax.

@ Giridhar

There is no relief in tax even if he purchase a residential property as section 54F is not applicable as he already owns a house.

Secondly he can't invest sale proceeds of plot into Govt Capital Gains Bonds u/s 54EC ad it is now not allowed for sale of plot.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register