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LTCG on Property sale whose indexed purchase value is more than realized sale

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Shrish

Sr. Architect

20 Points Posted on 02 November 2022

Dear All,

I purchased a residential property in FY 2008-2009 in Bengaluru for Rs. 22L. I have spent additionally 6 L for improvements. some messonery work, flooring ,furniture etc. . I have sold it in FY2022-2023 at 57L

Now as per indexation COst of my property is = 22* 331/137 = 53.15 L

similarly indexed cost of improvement = 6 * 331/137 = 14.5 L

My sale price 57L - 53.15-14.5 = 57-53.15-14.6 = -10.65 is negative.

So do I need to pay LTCG on this sale ? as I am actually not gaining it is loss to me.

Please guide me.

Replies (2)

Quick Summary

This discussion addresses a common query regarding Long Term Capital Gains (LTCG) tax on property sales. The user purchased a property for Rs. 22 lakh and spent Rs. 6 lakh on improvements, later selling it for Rs. 57 lakh. After applying indexation, the calculated indexed cost of the property and improvements exceeds the sale price, resulting in a notional loss. The consensus is that no LTCG tax is payable in such scenarios, as the loss can be carried forward and set off against future income, provided the Income Tax Return is filed on time.

sushil bhambani

11 Points Posted on 02 November 2022

No You will have to pay no tax, as it's a House property loss which will be carried forward and will be set off against future income. Only condition is that Income Tax return should be filed on or before due date