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Capital gain on sales and purchase flat

SANJAY (MANAGER) (67 Points)

12 May 2011

Please help me for capital gain

I purchase flat in mar 2001 @ 551000/- ,additional exp jun 2002 @ 50,000/- and Dec 2005 renevation 1,50,000/-

I sold this flat in May 2010 @ 20,00,000/-(twenty lacs)

Now I am purchasing new flat with cost 24,75,000/-+1,50,000/- stamp. For working capital gain for tax purpose and how much amount I required to pay as well as Bank loan for new Purchase flat. If anybody tell me proper then accordingly I will pay and save tax . I am working person and my wife is housewife. Old flat was on both name same case for new flat.

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4 Replies

(Guest)

Full value of consideration

2,000,000.00

Less: Transfer Expenses

0.00

Net Considaration

2,000,000.00

less:indexed cost of Acquisition

551000 X 711/406

-964,929.00

less:indexed cost of improvement

50000 X 711/447

-79,530.00

less:indexed cost of improvement

150000 X 711/497

-214,588.00

Gross Long Term Capital Gain

740,953.00

Less:Exemption U/s 54

1) Capital Gain

740,953.00

2) Cost of New Asset

2,625,000.00

-740,953.00

Net Long Term Capital Gain

0.00

Note :Provided the new asset should not be transfered within 3 yrs from the date of ist acquisition. if the new asset is transfered withing 3 yrs the exemption will withdrawn.

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SANJAY (MANAGER) (67 Points)
Replied 13 May 2011

As capital gain 8 lacs so that 12 lacs amount is pending with me. New purchase flat cost 24 lacs, 8 lacs by cheque payment and 16 lacs as bank loan. Remaing 12 lacs I can spend anywhere or still tax part on this amount.

(Guest)

Thanks for your reply. Section 54 : EXEMPTION FOR RESIDENTIAL HOUSE. According to above section Long Term Capital Gain on transfer (sale) of Residential House (except self occupied property for business) shall be exempt if the AMOUNT OF CAPITAL GAIN is utilized for the purchase or construction of another residential house. In your case Long Term Capital Gain is `7,40,953.00 and your are making payment of `8,00,000.00 by cheque. That is you are utilizing more amount than your Long Term Capital Gain. So, there is no need to make any investment for the tax benefit. Because there is no excess amount of capital gain in your hand. Still you have any doubt the above you can email me at ganesh.ghadage @ gmail.com For your information Section 54 AC: EXEMPTION FOR ANY LONG TERM CAPITAL GAIN LTCG on transfer of any LTCG shall be exempt if the amount of the Capital Gain utlised for purchase of Bonds of 1) NATIONAL HIGHWAY AUTHORITY OF INDIA 2) RURAL ELECTRICIFIATION CORPORATION LTD. Time limit: the above bonds should be purchased within 6 months after the date of transfer Maximum investment limit `50,00,000.00