I have taken 1000 sq ft plot at rupee 10L by taking loan of 7L for 10 years. After loan period end, if i sell it at rupee 20L, then will i have to pay tax on that whole amount? If yes, how much tax will i have to pay?
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Tax on Plot
Replies (10)
Hlo, here Sales value =20L less purchase cost 10L. Here indexation benefit available for you. So you can calculate purchase cost accordingly. Purchase cost will be more than 10L after indexation.
Here your capital gain will be 10L ie is 20-10. Without taking indexation..
You have to pay tax at the rate 20% on 10L since it is Long term capital gain.
Here your capital gain will be 10L ie is 20-10. Without taking indexation..
You have to pay tax at the rate 20% on 10L since it is Long term capital gain.
What si mean by indexation? how it is calculated?
Indexation is used to adjust the purchase price of an investment to reflect the effect of inflation on it. Please check this. https://cleartax.in/s/indexation-helps-reduce-tax-debt-fund-gains
Capital Gain will arise on the sale of plot:
Sale Consideration: Rs. 20 Lacs
Cost of acquisition: Rs. 10 Lacs
Indexed Cost of acquisition is to be taken: 10 Lacs*(CIF of year of sale/CIF of year of purchase)
so I will have to pay 10L* (20/100) = 2L tax
is that correct?
No. You can get the benefit of indexation... Please mention the year of purchase and sale.
year of purchase 2010. year of sale 2020
Cost inflation for 2010-11 is 167 and for 2019-20 is 289.
Indexed cost of acquisition will be
10L*289/167= 17,30,538
Tax will be ( 20,00,000-17,30,538) *20%= 53,892
Indexed cost of acquisition will be
10L*289/167= 17,30,538
Tax will be ( 20,00,000-17,30,538) *20%= 53,892
Thank you for explaination...Now i understood...but how i can calculate cost inflation
It is the value fixed by govt every year.
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