Timelines for capital gains on sale of property

Tax queries 256 views 3 replies

Abida Ansari

Housewife

25 Points Posted on 28 August 2016

Dear All,

We sold a property recently which has generated some capital gains.

We are contemplating between various options available to pay / save tax on these gains.

However we are confused about the timelines for various options.

Details of the property are as follows - Would be great if someone can help us with the deadlines for each of the available option

Details

Residential property (Apartment) in Mumbai

Bought & Registered in Nov-2010

Sold in May - 2016 (very small token exchanged in March-2016 which has a mention in the sale agreement, Sale deed registered in May - 2016)

Transaction completed with all payments recieved in June - 2016.

Now the questions are

1) If we decide to pay the 20% tax on capital gains .... By what date do we need to pay the tax to the income tax dept.

2) If we decide to invest in REC/NHAI capital gains bonds .... By what date latest do we have to buy these bonds to save on tax

3) If we decide to invest in another house property .... by what date can we buy the new property (it says within 2 years ... so for us what would be the deadline)

4) If we decide to open a capital gains account with a bank (to eventually invest in a property) .... By what date does this account need to be opened.

5) The Buyer deducted 1% TDS at the time of making his payment .... In which of the above options can i claim a refund for this 1% amount.

6) Finally, does the token exchange in March-2016, push my relevant date to the previous financial/assessment year? .... The token was just 0.5% of the consideration .... The sale deed was registered in May-2016 and bulk of the payment was made then

I know these are quite a few questions ... would be great if someone could provide answers.

Searched the forum before posting .... but couldnt find a spefic thread/post detailing the timelines ... hence posted as a new thread .... If this has been answered earlier ... Please point to the thread .... Else this can serve as a good reference for others looking for similar timelines.

Thanks in anticipation !!!

Replies (3)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

211715 Points Posted on 30 August 2016

1. Total tax liability is devided in 4 installments as 15% by June 15th; 45% by September 15th; 75% by December 15th & 100% by March 15th.

2. Within 6 months, i.e by November 2016.

3. May 2018 (provided the capital gain is deposited in Capital gains savings account, before due date of filling the return.

4. Before filling your return of this year, latest by July 31,2017.

5.In both options of investments, bond or house property; If advance tax to be paid, this gets reduced from the total payment.

6. Registered Sale agreement and possession hand over date counts more.

Good Luck.

Abida Ansari

Housewife

25 Points Posted on 30 August 2016

Dear Sir,

Thank you so much for the detailed response.

This is very helpful.

Can i ask just one more query though.

Question - If the TDS deducted is Rs.1lac, while my capital gains liability is Rs. 3lacs. Which of the following cases would apply

1) I can pay the net amount of Rs.2lacs as capital gains

2) I will have to pay the full Rs.3lacs as capital gains and then cliam Rs.1lac as refund in my next income tax fililng.

Thanks again for your time

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

211715 Points Posted on 31 August 2016

1. Your tax liability reduces by 1 lakh as TDS, and you will have to pay remaining amount, here 2 lakhs only.

2. Going back from 3 Lakhs tax liability implies your LTCG around 15 lakhs, So even if you invest Rs. 10 lakhs in NHAI/REC bond u/s. 54EC, (for just 3 years, at 6% interest), you save 2 lakhs tax, and your advance tax liability comes to zero. ( & No refund as TDS gets absorbed)