suresh (Self Employed) (25 Points)
28 August 2012I bought a land in our area which was registered @ Rs 200,000. Now i want to sell the same and it would be registered @ Rs 350,000. Since i am selling i got a profit of Rs 150,000. My question is how much i need to pay tax and alternatively if I purchase another land am i exepted from tax? Kindly help
Giridhar S Karandikar
(Team Lead)
(7543 Points)
Replied 29 August 2012
You have not given the period for whihc the land is held by you. Pleas note that the land should have been held for a period of 36months from the date of purchase so that on sale of the said land there would be a LTCG & you can avail the exemptions. However if the land is held for less than 36 months then no exemption can be availed and tax @ 15% would be requried to be paid.
If it is a LTCG You cannot get any exemption by investing the sale proceeds in land. You can purchase the bonds issued by NHAI or REC to invest whole of the Capital Gains. However these need to be purchased within a period of 6months from the date of sale.
suresh
(Self Employed)
(25 Points)
Replied 29 August 2012
CA Harshal Vora
(Author of ISCA)
(160 Points)
Replied 03 September 2012
If the capital gain would be LTCG, then you would have saved all your gains by investing (i.,e by purchasing) a residential house as per section 54F.
Since it is STCG, you are required to pay tax @ 15%. If you over annual income is less than exemption limit then you can set-off the balance of exemption against capital gains earned and balance has to be paid @ the rate of 15%.
You can give donation and for the same you can also claim as deduction as per respective section.
This is my opnion and please do consult a professional before taking any further step who will help you out better than me.
Regards,
Harshal Vora
AmitS
(Manager)
(31 Points)
Replied 04 September 2012
Harshal,
Thanks for your reply. Will tax be calculated at prevailing slabs based on where an individual fit in from income perspective or it is flat 15% in case of STCG?
CA Harshal Vora
(Author of ISCA)
(160 Points)
Replied 04 September 2012
It will be flat 15 % irrespective of the slab in which your other income falls.
AmitS
(Manager)
(31 Points)
Replied 12 September 2012
Hi Harshal,
Thanks for your prompt response.
But I am still confused & worried, based on https://www.charteredclub.com/capital-gain-tax/ , STCG arising out of property is to be taxed as per income tax slab of an individual.
This link I got from another post in caclub.
Can you confirm & provide any pointer to income tax rule/section which states STCG for under construction property is 15% flat?
CAclubindia
