Long term capital gains tax on sale of residential flat.

462 views

Save Share

Join Us Follow Us Add as Source

Gaurav Shinde

21 Points Posted on 30 December 2015

Hi,

I bought a flat for Rs.21,00,000/- in 2011.

I will be selling it in 2016 for 34,00,000/-

Long term capital gain total is Rs. 23,00,000/- but the indexed capital gains comes to around Rs. 5,00,000/-

Right now I am pursuing education abroad. I plan to use the money to fund my education.

How can I avoid or minimize the tax I pay on this capital gains. I am open to re-investing the approximately Rs. 5,00,000/- indexed capital gains that I have made.

Thanks in advance.

Replies (2)

CMA Poornima Madhava

CMA

9106 Points Posted on 30 December 2015

Capital gain without indexation works out to be 13 lacs (from the info). Since the asset is held for >36 months before sale, it shall be considered as long term asset and indexation needs to be done for computation of gain. Gain after considering indexation can be invested in bonds (u/s 54EC) in order to claim exemption.

CA Gajanand Gupta

partner

22 Points Posted on 30 December 2015

I agree with Poornima, You can invest Only Gain i.e around Rs. 5.00 Lacs and can save whole tax. Further If you have not any other taxable income in this period, you can also claim Rs. 2,50,000/- which is basic exemption limit, available .