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Query about Tax on Sale of Flat

604 views 4 replies

Vinod Lakshmanan

Tech Lead

47 Points Posted on 10 January 2011

Hi, We had purchased a house in 2003 for 8 lacs, and have sold it in May 2010 for 35 lacs. From the sale proceeds, we purchased a flat for 29 lacs. I have the following queries: 1. As per my calculations, there should be no capital gains for this transaction. Can I file for capital loss? What is the advantage of doing so? 2. Does the balance amount of 6 lacs (35 lacs - 29 lacs) constitute income from property? How would it be taxed? What are the best ways of investing the same? Thanks, Vinod

Replies (4)

U S Sharma

glidor@gmail.com

21068 Points Posted on 10 January 2011

8 lacs x 632 ( current index) /447 (2002-03 index) = 11.31 Lacs index value as on date of sale

35-11.31 = 23.69 Lacs LTCG

Sangeet Lodha

article

65 Points Posted on 10 January 2011

After considering the purchase of your new flat, there will be no capital gain. If you would not bought the flat, there would be a capital gain. Maximum exemption u/s 54 is allowed to the extent of capital gain computed or amount invested in new flat, whichever is lower. As the value of your new flat exceeds your capital gain amount, there will be no capital gain. But you can neither claim a capital loss.

Again, the balance 6 lacs shall not be treated as income from the said property. And for best investment opportunities in the market you may consult some expert. Bye