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Is ltcg on property eligible to be taxed at slab rates ?

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Noel Dsouza

Rating Analyst

75 Points Posted on 06 May 2013

Dear friends.

I have a query with respect to LTCG on property sold. Example: if the assessee has LTCG on property of Rs. 3 lacs. & also earns pension income of Rs. 50,000/-. Would the LTCG of Rs. 3 lacs be utilized towards the remaining slab rate of 2 lacs (ie. 2.5lacs - 50k pension income) ? or would the entire LTCGL Rs. 3 lacs be taxed at 20% ?

Pls Help.

Replies (1)

Sonam Bidasaria

770 Points Posted on 07 May 2013

Proviso to Sec 112(1)(a)(ii) reads as under:

SEC 112(1)(a)

(ii) the amount of income- tax calculated on such long- term capital gains at the rate of twenty per cent: Provided that where the total income as reduced by such long term capital gains is below the maximum amount which is not chargeable to income- tax, then, such long- term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income- tax and the tax on the balance of such long- term capital gains shall be computed at the rate of twenty per cent..

In your case, out of rs. 3 lacs, 2 lasc will be expemted and balance 1 lac will be chargeable at the rate of 20%.