I request guidance for the following issues regarding Long Term Capital Gains on House Property. My relative is planning to sell a Residential Property purchased by him in the 'Seventies, and would like the following clarifications reg LTCG:
1. For a property purchased/built in the '70s, is it the right approach to get a Valuer's certificate for its Market Value in 1981 (to be subsequently Indexed)? Or is it necessary to have the original cost of the '70s itself used with the 1981 Index?
2. Cost of additions to the property in the '80s and later are only to be simply Indexed, or also Valued by a Valuer?
3. For reinvestment of Capital Gain u/s 54EC or into another House property, the capital gain amount is to be kept aside in a Cap Gain Scheme account:
- IS the entire Cap Gain amount to be kept in such an account, or only the amount to be used for Reinvestment?
- What is the Latest day to put in such Cap Gain amounts into such an account- eg Immediately after Sale; end of Tax Year, etc.?
4. The IT Rates schedules for LTCG also mention a tax rate of 10% in benefit of Indexation is not taken. Since for very old properties, this rate is more beneficial than using the Indexation benefit (indexed cost also being very small), can one plan to make use of the 10% rate without indexation in this case?
Thank you.
CAclubindia
