Tax liability out of selling flat

As the holding period is less than 3 years the profit of rs. 4 lacs on sale of capital assets I.e. flat will be computed under short term capital gain and will be added to other income, the tax will be calculated axcordinhly . Further there is no exemption benefit on short term capital gain

agree with Mr Naveesh.

Try ho hold the property for 3 years. Then only benefit can be claimed.

Agreed with above, to get benefit of exemption u/s 54, the asset to be transferred should be a long term capital asset which means the holding period should be 36 months

dear  omesh, 

try holding the flat for one more year. then it would become long term capital asset and then there would be ways to mitigate tax liability......

Does it mean that :

1)only Long term capital gain can be reinvested into a property to

 save income tax?

 

2) and you have to pay income tax necessarily for short term capital gain?

Yes the option to save tax on capital gain is available on long term by reinvesting the capital gain amount.

First tell me where you got a flat in Navi Mumbai for jus 27 lakhs. I would like to buy one too then. Secondly, coming to your query; as per section 54 of Income tax act, 1961 you can only take advantage if property is held for atleast 3 years i.e. long term gain has arised after selling of property. Also you must then purchase property a year before or within two years from the sale of the said property. Application of Long term gain arose from the sale of property shall be allowed as deduction u/s 54 to the extent used for sale or construction of new house. The property whether sold or purchased must be a residential property. And lastly, tax has to be paid on short term capital gain from sale of residential property.

Dear all, I have taken home loan for this property. I take rebate on income tax on the interest paid on home loan.My query is: 1)If I sell this property now(i.e in two years only) then does the rebate claimed on interest paid on home loan will also be reversed? means.....will that rebate claimed also add to my income now ?

No it is not the case, deduction already claimed will not be reversed

dear omesh,

there is no need to be worried. you might have claimed deduction as per section 24 or an additional deduction under 80EE(Chapter VI-A deduction) in case the interest on loan exceeded the limit specified under section 24.

any way there is no such provision as reversing the deduction claimed(it is worth mentioning here that there are some provisions which reverse the deduction or exemption. you might have got confused with any of these provisions)

any way in your case none of those provisions are applicable

But if you sell this property today i.e. only after two years the section 80C benefit which you might have availed on principal repayment will be reversed. This condition is given u/s 80C that the property must be held for five years.
 

Agree with ABHISHEK.... if you sell the property within 5 years than whole tax benefit claimed in the earlier period will be added back in your income .