Long Term Capital Gains Tax (LTCG) on Property Sale

Anything and everything that is sold in this country bring tax implications and property is no different. Infact, long term capital gains tax on property or LTCG on property is something that must be area of consideration while planning to sell property.

Capital gain is one of the heads prescribed under Indian income tax act, 1961 specifies taxation laws to tax gain on sale of capital asset. When a property is sold within one year it is subject to Short Term Capital Gain (STCG) and when sold after one year, it is chargeable under Long Term Capital Gains Tax in India (LTCG)

Long term capital gain tax rate is 20.6% of the profit after indexation of cost. Indexation of cost basically refers to a facility that a taxpayer can use to inflation-adjust the cost. In other words, indexation factors in inflation during the holding period by adjusting the cost of acquisition upwards thereby bringing down the tax liability of the investor

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Let’s understand with the help of LTCG example –

Property was bought in the FY 2005-06 for Rs 1 crore. The same is being sold in 2008-09 for Rs2 crore. A simple arithmetic subtraction would result in a long term capital gain of Rs 1 crore.

Now, this property has to be adjusted to inflation index to arrive at the correct capital gain.

Also Read: Best Tax Saving Options for Salaried Class

The CII for FY 2005-06 as declared is 497 and for 2008-09, it is 582. If the cost is adjusted with the ratio, the revised cost would work out to be Rs. 1.17 crores, thereby bringing the capital gain amount down to Rs 89.87 lacs.

This Rs. 89.87 is now chargeable to tax @ 20.6 % (effective rate) for the purpose of computing capital gain on sale of this property.

Clearly it is evident that inflation adjustment helps us to save tax by increasing our cost of acquisition of property. But why do we adjust it for Inflation?

Also Read: Saving Tax by Investing in NPS

Answer -The value of the rupee say 10 years ago wasn’t the same as the value currently – essentially on account of inflation. What was worth Rs 100, ten years ago will not be worth the same now. So if you are asked to pay tax on your profits derived out of a simple arithmetic of reducing actual cost from the sale proceeds, it would be unfair. Simply because the sale proceeds are derived out of the current value of the rupee, whereas the cost you paid was based on the value of the rupee as existed 10 years ago in this case.

How to save Long Term Capital Gains Tax (LTCG) in India

Section 54 under Indian Income Tax Act, 1961 gives us ways to save capital gain subject to fulfilment of certain conditions. Capital Gain under section 54 can be used to save up to the amount used for buying or constructing new house. If the amount of capital gain is greater than the amount buying a new house, the remaining amount of capital gain will be taxed.

How to Calculate LTCG and STCG

Example

CAPITAL GAIN>NEW HOUSE COST, then taxable amount shall be capital gain minus the cost of new house.

If the new house purchased or construct will be sold within three years from the date of purchase, the calculation of capital gain under section 54 is as under

  • Cost of new house < Capital gain, of new house = Nil
  • Cost of new house > Capital Gain, value of new house = Purchase or construction minus capital gain

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Comments

  1. says

    Property tax will be deducted on property sale that which area your property is..it depends on it and then calculated..but it is same in similar area?i want to know the calculation of capital gain tax.

  2. Tanvi Sawant says

    We bought a house for Rs.26,00,000 in 2010 & we have sold our property in 2014 for Rs.45,00,000 lacs, can i purchase a new house in MHADA property, to save our LTCG tax?, because property will get in our name after 8 years. Kindly suggest.

  3. Chandan says

    If father sells his flat and earns long term capital gain, and he wants to invest this money in the flat to be purchased by his son, then is his father is liable to pay the tax on LTCG.
    Thanks.

  4. goosey says

    For acquiring a Flat from AWHO at Greater Noida i made payments as below:
    FY 1997-98—————–48,433
    FY 1998-99—————–63,942
    FY 2004-05————–16,50,744
    FY 2006-07—————1,40,000
    FY 2008-09—————6,19,191
    Possession of the flat taken over on 04 Feb 2009
    Improvements done in FY 2008-09 at a cost of 92,000
    Stamp duty,Registration,Lawyer’s fee in FY 2012-13 at a cost of 1,95,360
    Sold flat on 17 Jan 2014 at price of 55,60,007.
    Question:How do i calculate LTCG for investing in NHAI or REC bonds?

  5. Ramsh says

    Respected Sir,
    I possess a open plot in residential society for last 20 years.Now I want to sell it and want to purchase another open plot.Can I get long term capital gain advantage with cost immflation index calculation in this transection?I know this advantage for house property but I donot know for open plot that’s why I am asking this question.So please oblidge me
    by giving proper advice.Thanks
    Ramesh Patel

  6. balu says

    I purchased a agricultural land in 1982 of Rs. 20,000/-,and sold on July 2013 of Rs. 1.8 core, what is the long term capital gain tax and how to exempt the income tax on above amount. and also tell me the amount is gifted to my two children and me are equally share the amount. The gifted amount is tax exempted are not?. please tell me how to exempt the LTCG tax, buy agricultural and new house construction is eligible to exempt the tax?

  7. Nikhil Gadewal says

    Dear Bhavnoor,
    I own 2 flats. I am now investing in third flat as investor (No registration of flat will be done. It will be like an fixed deposit). I am paying 4 lakh and after 3 years builder will give back 8 lakh. So 8 lakh will be consider for capital gain tax?
    If so, after 3 years I can save 8 lakh as Long term capital tax by investing on third flat. My second query is am I eligible to avail long term capital tax for thrird flat, if I already have 2 flats on my name?

    Please reply to my queries as soon as possible by today.
    Thanks,
    Nikhil

  8. Jigar Shah says

    An Individual buys a residential property in September 2013. She pays installment or slab wise payments from March 2010. Initial amount of 2 Lacs has been paid from Assessee’s Account in March 2010 to Developer. In 2011 & 2012 all payments nearly 19 Lacs has been released from her spouse account to Developer. The registration & possession of Property has been taken in September 2013 after paying last installment in name of assessee.
    In June 2013 one of the HP has been sold for 25 Lacs & after indexing there is capital gain of 18 Lacs.
    Now points of Query is
    Does Assessee can get exemption u/s 54 for residential property purchased in that year for long term capital gain?
    Does Installment paid before one year in advance then what will be date of acquisition? Is it March 2010 or September 2013? By Raw text it is September 2013 as many times department insisted on Possession.
    By showing it as advance to Developer in both i:e assessee & her spouse one can say that property is purchased in September 2013 for availing Exemption?
    Lastly can advance be shown as Loans & advances? Do advances in her spouse account can be transferred to her Account by netting both in her account? At her account can we show that? Does that mean the property lastly validly purchased by her & paying interest to her spouse for borrowing in form of advances?

  9. N S Jayakumar says

    My friend sold a portion of his property(revenue land) in Bangalore for Rs55 lakhs in June 2013 and is planning to invest Rs 50 lakhs in 54EC Bonds to save LTCG Tax. Also he is planning to sell another portion of the same land in November 2013 for Rs 60 lakhs and invest Rs 50 lakhs in 54EC Bonds in April 2014. Please advice is it OK?

  10. Ravi says

    Hi

    I booked an apartment in Chennai 2008, in the name of my wife, availing a housing loan. We got possession of the flat in 2010, and we moved in 2011. I am still servicing the home loan, balance outstanding is INR 85.00 Lakhs.
    Now my wife’s father is likely to give her a share of a property he proposes to sell and give to his daughters. My wife’s share is likely to be INR 100 Lakhs.
    Can I use this money to pay up the existing home loan, and save capital gains tax, to the extent??
    Pl clarify, thanks

    Ravi

  11. Manoj says

    Hi Bhavnoor

    I have a query. I booked a flat in gurgaon through a builder in 2008 and did not get possession till 2013. Flat was booked at 20 lacs . I paid only 35 percent payment and o registration was done. Only allotment letter and sale deed is done. I sold the flat in 2013 at 40 lacs.
    1 Now my queries are will extra 20 lacs will be considered as LTCG.
    2 I have open a Capital gain account and put the amount into the account. Can I book more than one property using that amount in next three years.

    Please help me on Sam
    Manoj

  12. Savio says

    Hello,
    I have found a property in goa (Ambaji area) 325 sqm @ 19,300 per sqm.
    Would it make sense to buy the property in complete cheque or shld i split it up as cash and cheque. How would it benefit it me in the long run when i want to sell.

    Also, what is the tax implications for Land is it same 20% LTCG….
    Please advise.
    Thank you
    Savio

  13. vivek says

    Hi

    I have sold a property of 65 lakhs in nov 2012. And I want to claim the exemption under 54F. I have booked a flat in year 2010. I want to claim exemption for payment made 1 year between nov 2011 and nov 2014. Can I do that ?

    Thanks
    Vivek

  14. Satheesh says

    1. Acquired site on April 2006 for 4.5 Lakhs
    2. Sold this property on Aug 2012 for 33.5 lakhs
    3. Purchased site on Sept 2012 for 48 lakhs
    Now the clarifications are
    1.Whether capital gain applies??
    2. If it applies….what are the calculations
    3. What the solutions…

    please clarify.

  15. Girish says

    I booked under-construction flat in Mumbai in Nov 2009. Agreement was registered in March 2010. Possession was taken in Sept, 2011. Due to defects in the flat, I wish to sell this flat and buy other ready to move flat for own stay. If I sell in July, 13, will it be LTCG or STCG i.e. whether to calculate 3 yrs from registration date OR possession date. Plz advise. Thanks

  16. Kiran says

    Hi
    My father received some 9L share on a joint residential property sale. The sale was done in the year 2007 and the property was acquired in the year 1947. Total property was sold at Rs. 90L. Do we need to pay a capital gain on Rs. 9L? How much will it come? Now my father is not in a position to pay any amount. So, will that capital gain tax need to be paid by me?

    Thanks

  17. Manish says

    We have received an advance of 40 lakhs against sale of inherited property in F.Y. 2012-13, there are four legal heirs & the money was divided equally i.e. Rs.10 lakhs each. The balance payment was yet to be received & the transaction has gone into litigation.

    What will be the tax incidence for me for Rs. 10 lakhs received as advance.

    Request some expert to guide me on this.

  18. veena says

    Please provide me your contact number or email id. I need to avail your specialised service. call 08081344446

  19. Vinod says

    Sir,
    I have booked a Apartment on 10.08.2001 and entered into agreement with builder on same day for Rs.12,02,793.00(Rupees Twelve lakhs two thousand seven hundred ninety three only).I took a possession of the said Apartment on 11.04.2003.
    on 27.02.2013 i have sold the flat for 1,15,00,000/- (Rupees one crore fifteen lakhs only).
    From the sale proceeds i have closed my housing loan account out standing loan balance was Rs. 8,03,000/-

    Please let me know how much capital gain i have made? and my tax liability ?

    Sir i intend to buy a new flat from the entire sale proceeds and planned to open a capital gain account (Plan – A) with a Nationalised Bank. please guide me how much amount is to be kept in capital gain account.

    I will be greatful if you you can sand me a reply on top priority basis as the last date of filling a return is 31.07.2013( I am a salaried person)

    Warm Regards,

    Vinod

  20. Rajashri says

    Dear Sir,
    Thanks for the information. I have one query. I sold a non-agricultural land on 17 April 2013 after holding it for more than 4 years. I had booked a flat in early 2009 for which the registration of “agrrement to sale” with the builder happened on 24 Dec 2009, but got the possession of this flat only in Feb-2013. Can I claim advantage of “reinvesting in house property” to save long term capital gain tax relating to these transactions? As the actual possession date is within specified limit of 1 year before the land sell transaction, can I claim investment in this flat from the long term capital gain arising from selling of the land? As on the Income Tax website, it clearly shows that the act of giving possession is treated as transfer of ownership for the purpose of Capital Gain. Please advice in this matter.

    Rajashri

  21. Amit says

    We have sold our industrial land and building for 1.10 crores in jan 2013 which was purchased in 2007 for 25 lakhs. we have carry forward losses of about 25 lakhs in the company which is a proprietor co. will the land and building be calculated seperately?? can we offset the carry forward losses against cgt ? can we avoid cgt by accounting for residential property purchased in 2011 june (agreement for sale done; sale deed pending). any other ways to minimise cgt. KINDLY ADVICE. Thanks

  22. G.Bordoloi says

    (i) I purchased a plot of land at Rs.10,000/- in 1974 and proposed to sell at Rs.50,00,000/ now. Will it be ok if I pay CG tax @ 10% of Rs.49,90,000/- (i.e. Rs.50,00,000/- Rs.10,000/-) which I believe the rate of unindexed properties ?
    (ii) Shall I have to mention the clause under which I calculated the CGT in my IT Return ?
    (iii) If so what is the clause No ?
    Thanking in anticipation
    G.Bordoloi

  23. Monica says

    Hi,
    I have a flat in Faridabad but it is still not constructed. I booked the same in 2008 but the possession is still pending. If i sell the flat right now(without registering in my name), will that be some kind of a taxable amount? Can i keep the entire money in a bank as FDs? Will that all be a White money for me?

  24. RAJAN says

    Sir, I sold a house site in Jan 2013. I understand I have time until Dec 2014 for purchase or Dec 2015 for construction. Now I want to book a flat. Is it purchase or construction ? How time limit is calculated for flats ? Should the possession be taken before 2 or 3 years ? or the undivided share of land should be registered before 2 years ? Will it be OK if I transfer the money during several schedules to the developer before the 2 year limit ?
    Please clarify. RAJAN

  25. RIDDHI says

    hi,

    I received a amount of Rs.5 lacs from my grand father’s 70 yrs old property. Can i invest in NHAI Bonds & save tax. please guide me.
    thank you

  26. Swapnil says

    hi Bhavnoor,
    I purchased a flat on 22.06.10 for 8 Lakhs and sold it in 2013 for 10 lakh (market value 11 Lakh). agreement for the sale was done on 26.03.13.
    I took 1 lakh as token money on 26.03.13, and remaining amount was paid in installments, I received 4 Lakh on 24.06.13, and as per agreement remaining amount of 5 Lakh is yet to be received.
    Now my query is that ,
    1. Which type of capital gain (ST of LT) will it attract.
    2. Is it permissible to claim 1 lakh as short term and remaining amount as long term.
    3. It is permissible to break the capital gain in two financial years as actual transaction took place in two years.

    I have already invested in new property can i claim for long term capital gain for the amount which i received after 36 months period of purchase of old flat.

  27. subramanian says

    dear sir,
    a land measuring 289 sq yds was purchased in 1992 and got registered jointly in self and my wife.
    the said land was sold in june 2012 for Thirteen lakhs and got it registered. my queries are as follows:
    a) since the property was in joint name, what is the equal share to be taken for tax assessment.
    b) whether for the above amount, tax to be paid and if so how much amount to be paid, at what % and the mode of calculation.
    c) the above amount was kept in two separate term deposits for one year with the expectation that we will be in a position to invest this amount in a house. But could not find any within year.
    d) These two TDs expired on 28.6.13.
    e) since the interest has not been drawn, can we convert these two TDs to capital gain fund and if so the number of years to be blocked
    e) whether the interest accrued on these capital gain fund are taxable
    f) Self superannuated from the service in the year Dec 2012 and yet to get 16A form from the organisation and I am now considered as senior citizen. Since the amount now received by me as a long term profit, am I eligible to pay tax.

    Please clarify my doubts and advise at the earliest.
    Regards
    subramanian

  28. Sudipta Pal says

    Sir,
    My father intends to sell his ancestral property which was solely in his name. He intends to gift 30% of the sale amount to his five sisters jointly. Can you please tell me if that gifted amount will be exempted from the long term capital gains tax or will he have to pay tax for that amount also?

  29. Ayaz says

    Hello
    I owned 2 residential plots in 2011. I started construction on one of my residential plot in April 2011. The construction ended in June 2012. Later, I sold the other residential property in Feb 2013 to repay the loan i had taken. Now i have no interest in buying a residential property because i want to repay the loan i had taken for construction. My doubt is, can i get LTCG tax exemption for my property sold in Feb 2013 by declaring the cost of construction of my house ?? Please guide me on how to get tax exemption on LTCG. Thank You

  30. Rajesh Bisht says

    Hi ,

    I purchased (booked ) a builder house in 2006, clear all amount in 2011, but didn’t taken the possesion & didn’t done the registry. Now, I am selling this property.

    Please advise if this will come in LTCG. Will I be able to take the benefit of indexation on this?

    Regards

    Rajesh Bisht

  31. Balaji says

    Hello

    I have bought a land for 40Lakhs and the guide value was 66lakhs. so we have mentioned in the document that the sale consideration was 40lakhs and market value was 66lakhs. the amount of stamp paper purchased was for the guideline value.
    now I have a got a offer for the same flat at 60lakhs. but again it will be registered for 66lakhs. can you help me out in calculating the STCG.

    Regards and thanks in advance

    Balaji

  32. says

    Dear Mr. Bavnoor

    I had made Purchase agreement in Dec12 for the total purchase of New Flat at Bangalore 75 lacs (inclusive Vat,Servicetax, Registration charges)which is under construction and would be registered and handed over to me in Dec 13. I started effecting payments in installments and a total of Rs. 70 Lacs paid till May 13.
    As my Flat sale in Mumbai was getting delayed I had to raise this total of 70Lacs by selling stocks( which are held for more than 3 years- LTCG) thru NSE/BSE.

    I Finally I could get a buyer and had sold a Flat in Mumbai in May 13 and got Capital gains of 68 Lacs ater indexation.
    1. Do I have to pay any Capital gains tax… as my New Flat registration is going to happen in Dec13. ?
    2. Do I have to pay any capital gains tax , as i have effected 70Lacs payment(thru Stock LTCG sale) before I sold my old mumbai Flat.
    2. Can I utilise the money 68 lacs the way I feel like, as the agreed money has already been paid except 5 lacs (75lacs-70lacs)which would be effected at the time of registration-Dec13) , in investing in Stocks thru NSE/BSE on long term basis?

    Kindly clarify as I am bit confused on this matter

  33. Sumeet says

    Hi,

    I have purchased as flat in Sep 10 on home loan and currently i am paying EMI. Also my father wants to sell the flat which is in his name and want to utilise the amount against the home loan. Is there any chance by gifting, etc that we can save the LTCG which would arised from sell of the property?

  34. indpbaks says

    Hi
    I purchased a flat in Noida (Total cost 50 Lakhs) in June 2013 under DP Plan. I paid 20% down payment (1o Lakhs) from my pocket and taken a loan of 40Lakhs from bank for 20 years @ 11%. I am paying an EMI of about 40,000/- every month.
    I am planning to sell the flat this year and use the funds by new property. The premium which I am getting is 12 Lakh, which is over and above what I have paid 10 Lakhs down payment. So the buyer is going to give me 22 Lakhs
    Please advise
    1) If I have to pay STCG ?
    2)What is my total acquisition cost ? Is it 10Lakhs the down payment only or 10Lakh+ 4.8 Lakhs, EMI Paid for one year (40k x 12) = 14.8 Lakhs ?
    3) What is my income / appreciation in this case ? Is it 22Lakhs-10 Lakhs = 12 Lakhs ?
    Or 22 Lakhs – 14.8Lakhs = 7.2 Lakhs ?

  35. Manas Sahu says

    Dear Bhavnoor,

    I had purchased a flat in 2005-06 for Rs. 1350000/- and another flat in year 2010-11 for which i have taken a loan of Rs. 4000000/-. I am planning to sell my 1st flat for Rs. 4500000 and plan to close the loan of 1st house which is about Rs. 900000/- and put the balance amount as part payment of 2nd loan. Please let me know the following:
    1. Do i will have to pay the capital gain tax? If yes then how much?
    2. Is there any way to save the capital gain thax in this scenario?

  36. Abhinav Srivastava says

    My Father has a property(present value is 638000 Rs.) which he wants to gift to her sister-in-law. If she sells this property then capital gain arising on such property will be taxable in the hands of my father or her sister-in-law. Te property was purchased in year 1980 for Rs. 15000. Kindly reply to my query as soon as possible.

  37. Parag Joshi says

    hi
    can i buy multiple property (2or3 flats, of a plot and flat, ets) after selling my house.
    i dont have any other property in my name

    also if the amount deposited in Cap Gain Gaving A/C is not utilised 3 yrs after deposit is that amt taxable or that amt is tax free?

  38. says

    i have a flat in year 2002-2003 for rs. 316000 and sold in this year 2013-14 for rs 1321000. the capital gains works out for me as rs. 657187 by calculation. and tax on it is rs. 131437. so i have to avoid tax paying, please tell me what else i can do. i had also purchased a new flat for 2000000 but by making a bank loan for rs. 2000000. so i cannot show investment in this new flat. please tell me the way by which i will not have to pay the tax rs 131437. can i show repairs and renovations in new flat purchased and for how much amount of repair i have to make to avoid tax

  39. Shravan sharma says

    my father sold old property and same cash given to me for purchase land in city
    What is income tax liabilty to me.(father gift me cash 5 lac and same deposit in saving bank)

  40. Shravan sharma says

    My father sold property in village and same distributed to me by cash 500000.00 for purchase of plot in city.Sir what is the my income tax laibilty .(father gift me cash amount and same deposited in my saving account) Please give me advice

  41. ayush says

    can i buy property on GPA to save LTCGT because i hear registration of GPA has started at delhi recently with stamp duty. is it true? is GPA registration available in all areas of delhi? can i purchase such property to save LTCGT?

  42. B N Gupta says

    I sold an URBAN LAND in 2004-05,and invested full consideration,by paying to a builder for purchase of an under construction apartment,in 2005-06 agreemen for sale has been issued by builder in 2005-06 itself, apartment is yet under construction,I have also taken loan from bank for making balance payment, I have repaid the loan ,now I plan to sell(in2013-14) this property before getting possession and invest full consideration in purchasing a flat which is also under construction. Please tell me what will be my tax liability

  43. harbhajan singh says

    hi Bhavnoor
    I wanted to transfer my ancestral agricultural land [ agricultural land was tresferred to me by my maternal NANA JI] to my wife.But instead of simple transfer of deed she bought it from me as a buyer for 20 lac [land measures 11 kanal and 7 marlas near jalandhar.Village is within 8km of corporation].Registry was done in january 2013 and it is registered [intakaal / jamabandi ] by local patwary also.
    My ques is what is my capital gain tax liability

  44. hardik shah says

    Hi!!
    My Mom had sold a property at 25 lacs which costing as per CII Rs. 12.50 lacs.
    Now she is not capable to purchase a new house, hence I am helping her by funding through Housing Loan on my name. but in this case New house will be in joint name i.e. my mom & me. and I will be the first owner.
    So it is relevant that to save LTCG of my mom, I can also be a Co-owner of the same property. and ha she will contribute the part of her LTCG.
    Please reply me its urgent.

  45. maneesh says

    Hi

    If i’m getting a Long Term Capital Gain in an FY and in the same FY i reinvest in a ready to move in house (another property), in this case do i need to open a separate LTCG account with the specified banks or i can directly invest the gains from my savings for the purchase of new house.

    As per my understanding we need to open LTCG only if we need to park the money for more than the FY in which the property is sold (i guess 3 years if i’m not wrong)

    Please help with this query

    Regards
    Mohit

  46. Naveen Gupta says

    Hello Sir,

    I have purchased residential plot in June 2004, constructed it in 2007 and sold it in Oct 2010.
    Total LTCG is 6.2 Lac with cost indexation benefit.

    I have reinvested the money in purchasing a residential plot for building a house in Dec 2010 for amount 20 Lac. I have not yet received the posession for this residential plot from the builder.

    Do I need to pay capital gain tax for this transaction?

    Regards,
    Naveen

  47. dheeraj says

    hello sir,

    i have just sold my house for 25 lacs on 6 june 2013 ..the house was constructed in 1986
    for amount approx 78000….unfortunately i have no job hence i am not sure whether i ill be able to purchase a house within 2 years as required
    suppose if i keep this money in FD in my name , for 1 year and then transfer the amount to CAG special account what will be the tax liability
    a) assuming i am still unemployed at the end of this period
    b) i am employeed and fall under 20 %bracket
    i short i dont want to park this fund in CAG account since i cannot utilise it for daily living purpose if i remain unemployed

  48. says

    Currently I am a retired person living with my wife in Gujarat. I own one residential house which I constructed in 1990. I first bought the land for Rs. 85000/- in 1987. And then ,I constructed my house in 1990 with the completion certificate. The amount of sale deed of the land was approx. Rs. 26666.00 in 1987. Now, I want to sell my house. At current rates, I may get approx. Rs. 80 lacs of my resi. house.

    From the sale proceed of Rs. 80 lacs, I want to buy one flat within Rs. 40 lacs. Remaining amount, I want to put rest of 40 lacs Rs. in a scheduled Bank fixed deposit at 9% to earn a monthly interest income but after deducting a Long Term Capital Gains at the rate of 20.6%. Can I do so or not? Please advise me and oblige. Thanks with regards.

  49. karan anand says

    Hello.
    I have a query as follows:
    A mother has a capital gain worth 27 lakh, want to save tax through spending on construction of residential property which is in the name of her son. Is the deduction allowed to her u/s 54??..
    If not allowed, than please guide me the ways how an ssesse can save tax

  50. Ritu says

    We purchased an under construction flat in September 2009 and got it registered in March 2013 and have been living in it since then. We have to sell it now due to change in future plans. Would it attract short term or long term gain… can I avail indexation benefit on the profit. Also I believe I do not have to give back the benefits I availed under 80C.

    The problem is I am not sure whether the registration or the booking date is considered as the purchase date

  51. Ritu says

    hi,
    We purchased an under construction flat in September 2009. we got it registered in April 2012 and have been staying there since then. we now have to move out of the city for some personal commitments and we dont intend coming back. we plan to sell the flat around end of this year. what would be the purchase date and wil this qualify under short term or a long term tax.

  52. Krishna says

    Dear Sir,
    I have sold my land (in parts) in June 2012 (it was bought in January 2009) and I am planning to invest the profit in 2 or more flats. I have the following questions for Saving Long term Tax:
    1) Are these flats have to be a new construction?
    2) Can I invest in two or more flats? Currently I do not own any house.
    3) I am planning to book for the under contruction flats by July 2013 and pay all the profts I made by July 2013 ; the completion dates for these flats are in the year 2016 or 2017. Can I save tax by this investment

    Best regards
    Krishna

  53. Mohan says

    Dear Bhavnoor, Exemption under Sec 54F is available if the assessee is not holding more than one residential house. Hence capital gain in this case will not be exempted from Income Tax.

  54. Damodhar Rao says

    I am a salaried employee in Central Govt Service. Last year November’2012 I sold a site which was in my name and was gifted to me by my brother. Within what time limit should I invest the amount in a new builiding or Flat. Until I get an appropriate Flat/Residence where do I keep this amount? I have another site. Can I go ahead and construct a house there? And should I declare my Capital Gains for the current year if I am not investing the same in the construction or purchase of new flat in this year? If I am not able to invest how do I declare CAPITAL GAINS and in which year should I declare it? Early reply would be appreiciated as the dates for filing retruns is nearing.

  55. says

    Sir,
    one of my relative, a lady, sell a plot about Rs 14 Lac in may 2012, which she purchased in 1996 about Rs 1 Lac.She purchase a plot alredy in march 2012 of Rs 3 Lac. Pl tell she have to pay any tax, or if she have to pay tax, how can save whether she have to purchase another property ( how much amount).Pl. Pl. reply
    bsnagar

  56. vaishali says

    Dear Sir,
    I Have flat in pune, which got register on our my name 9 June 2010, Now i am selling that flat. we purchase our flat for 20 lac and we are selling that for 30 lac. we have another house in pune.
    In that case please give me information about
    1. My capital gain counts in LT-CG or ST CG if I will make final sale deed on 10th June
    2 If I will make agreement to sale on may 2013, so is it counts in ST CG
    3. How much percentage I have to pay as tax on my profit.
    4. if i will reinvest that full amount in my new house which i booked in 2012, Is it beneficial for us to avoid CG taxes.

  57. anjuli says

    My father bought a MHADA flat in 1980-81 for around Rs 80,000. He is selling it in 2013 for Rs 1,00,00,000. He plans to buy another residential property within the next two years. He was thinking of opening a capital gains account in SBI, or should he just put the cheques in his regular SBI account, buy the new property and then put the balance in capital gains bonds?
    Please advise,

    Anjuli

  58. Nilesh says

    Hi,

    My Mother + 2 more partner (My uncle’s wife) has purchased commercial property for 96000 in 1993. Now they are selling this property for 15Lacs.

    So can you tell me how much income tax will be apply for them. All owners are senior citizen.

    What they have do if they want to save the tax.

    Thanks,
    Nilesh

  59. vikram says

    purchased residential property in 1999=Rs. 200000
    sold in 2012=Rs 1000000
    purchased 2 residential properties=Rs.400000+ Rs 500000.
    Sir,
    please state the position of Long Term Capital Gains as Income Tax Act

  60. Suresh Shinde says

    I have agriculture land which I plan to convert to NA Plots. I will develop myself and then sale. What will be tax implication

  61. Suresh Sehjpal says

    I own a residential house and is self occupied since 1988. Total amount invested in the house is around Rs.5.5 lacs. The current market price of house is around Rs.1 crore. I do not own any other property. Can I invest the amount in acquiring two residential flats approximately of the current value of this house? One flat for my own use and another for gifting away to my children/grand children. Under the circumstances, what are the provisions of the capital gain tax laws? Please guide me likewise. Thanks!

  62. Rajesh says

    My mother has sold jewelly for Rs 600000/- in april 2012 which she had since 25 years with her.
    she has invested in a underconstruction flat around 10 lacs so my question is if she can avail the benifit of Secton 54 .
    Or if we pay the tax after indexation than do we have to calculate as per the index of 1980 ?
    Also the most important part is that she does not have purchase bill of such old jewellry ?

  63. sundaresh says

    Hello, I purchased a site in 2003 for 4 lacs in 2003. It is in my wife’s name. We are fetching 45 lacs as example after selling this. We stay in another property where we have a loan of 35 lacs.This is in joint name of my wife and myself. We want to clear this loan from the proceedings. Can you kindly advise as to how to handle CG in this case ?

    Eager to hear from you,
    Thanks & regards
    Sundaresh

  64. murthy says

    Dear Sir.
    I have purchased a flat on 2005 for 5 lakhs & 2013 i have purchased a site(plot) for 10 lakh with bank loan. Now i would like to clear the loan by selling flat for 10 Lakh. &
    I will start construction by next year, Shoul i pay CG tax?
    seeking your help!!

  65. Sanjay S says

    Hi,

    I bought this house in Sept’10. If I sell this in Sept’13 and buy another house (joint ownership between me and my wife) within 2 years for higher value than capital gain, I understand LTCG is not applicable for me in normal circumstances. However I have also signed an agreement on June 2009 for another residential property. Me and my wife are joint owner of the same though housing loan is in her name. Possession is expected in June 2013. This house I plan to keep for long term.

    So considering my another house transaction which I plan to keep for long term, will there be any impact on LTCG exemption on my first house which I wish to sell in Sept’13? I mean is it that LTCG can be exempted if I have only one property or no of existing properties doesnot have impact on LTCG exemption ?

    Thanks in advance.

  66. Sheena says

    I earned long term capital gains on selling my property in Nov 2012
    To save on long term capital gains , i have recently invested in another residential property in both my husbands and my name .
    Since the cost of property is higher than my capital gains,he too will contribute in making the payments to the builder eventually.

    Its under construction currently and Possession date is Dec 2016
    I can do the registration before Nov 2015

    Does that meet all formalities for saving on LTCG ?
    I own another home which is solely in my name too.

    Thanks in advance for your help
    Theresa

  67. vicky says

    my mother gifted 1/2 share of property bought in 90′s to me and my brother on 31 DEC 12, we sold the entire land for 1.2cr on 18 Jan 13 , 30lacs my share what is my tax liability with and without indexation i have no other source of income what is the due date of advance tax, i’am planning to convert the amount to fd’s

  68. Madan says

    I have one commercial property and going to sell this around Rs. 25, 00,000/- but as per Collector guide line it’s market value is Rs. 29,00,000/- hence for sale consideration and LTCG calculation which value will be taken. Further if I want to keep the sale consideration amount in bonds, how much money I have to keep ?

    Thanks and Regards.

  69. RANGANATHAN says

    sir, my wife (only daughter) inherited a resedential land with a house in it. that was bought in 1957 by her father. mother and father are no more alive.
    she wants to demolish and do a Joint Venture with a builder. After sharing some
    flats with the builder, she wants the remaining flats ENTIRELY to her one son and two daughters in equal proportion. when doing so, will it attract Capital Gain TAX. if yes how to avoid or minemise tax or can she do Settlement
    in their favour.
    Note. son is a u s a green card holder, daughter is yet to get G C .

    PLEASE SUGGEST ME A SOLUTION.b mail id. branganathan27@gmail.com

  70. B B Bhandari says

    Can LTCG from sale of Gold ornaments and LTCL on sale of Shares be netted. Both the transactions took place in same Financial Year.

  71. Nitin says

    Hi

    Purchase Price 17,67,454 Aggrement Value 1651700
    Stamp Duty 65200
    Reg. Fee 17520
    Brokarage 33034
    Year of Purchase 2007 3rd May 2007
    Sale Price 40,00,000
    Year of Sale 2012 14th Jan 2013
    No of Years 5
    Purchase CII 551
    Sale CII 852
    Indexed Purchase Price 27,32,978
    Capital Gain 12,67,022
    Tax with Indexation 2,53,404
    Tax without Indexation 2,23,255

    I am confused. My Capital Gain comes to 12,67,022/- and Tax with Indexation comes to 2,53,404/- and without indexation comes to 2,23,255/-, so my 2 Basic questions are :

    1)for paying tax i have to pay 2,53,404 or 2,23,255/- .

    2)if i want to put money in NHA bond how much ? is it 12,67,022 or 2,53,404 . I have to take decision fast because i have to pay advance tax before 15 march or Invest in NHA Bond. Please help.

  72. Shibu says

    Myself and my wife each having 50% share in a flat which we intend to sell and expect long term capital gain of appx 15/20 lac. If I purchase a flat in the name of my son by investing 20 lac from this sum received, what will be the tax implication of myself, my wife and my son? Do we need to to submit any return? At the moment we don’t file any return. I am a senior citizen.

  73. pramod kumar says

    Dear Sir,

    I booked one property in sept 2008 in 15 Lac and villa is ready for possession and registry is still pending. Now I want to sell this property for 27 Lac with out registry. Will it come in short term capital gain/ long term capital gain? and what will be the tax liability

  74. Rahul says

    I bought a flat in 2007 for 32 Lacs and had to sell it off due to some exigencies in 2009 for 25lacs. I have not done any further invenstment. Can u tell me what would be my tax implications ( if a

  75. Rahul says

    Hi

    My cousion bought a flat in 2007 for 32 Lacs and sold it off in 2009 at 25Lacs .There was no investement done subsequestly. Can u tell me what all can be the tax implications .

  76. sopan chavan says

    property was purchased by father jointly with minor son, and entire payment of Rs.23,50,000/- was made by father . When minor son attending age of 31 years, the property has been sold for sale consideration for Rupees one crore. please state the position of Long Term Capital Gains as Income Tax Act

  77. mohita says

    i need help reg this:

    I bought a land in 2004. And gave that land for development in 2010. The consideration for land is 4 shops from the developer on the same project, which i will get possession in March 2013. How should i treat this Capital Gain?

    Please guide me with all available options.

    Thnks
    Mohita

  78. says

    I had booked a floor @ Rs 28,28,600/- in July 2009. The builder Buyer Agreement was signed in Dec 2009. The floor is still under under construction and pocession of the floor is yet to be offered by builder.
    I am planning to sell the said floor @ Rs 62,00,000/-. The sale deed is likely to be concluded by April 2013. I intend to re invest the sale deed amount in another property.
    I would like to know what is my LTCG Taxes and how I can can save the same

  79. Sahil says

    Combination of “purchase of REC Bond” and non indexation of long term capital gain is possible? Partly I wants to invest in REC Bonds and Partly i wants to pay tax without taking the benefit of indexation i.e with a tax rate of 10%. is combination of both os possible? plz reply

  80. Mr. Samsang says

    I have sold my residental house @ 63 lacs to purchase new residance @ 73 lacs in Mumbai.
    From Sales proceed the following expense i have incurred .
    1. Payment of existing Hosuing Loan – Rs.8.5 Lacs , Agent fees Rs.0.5 Lacs , Society Charges Rs.0.25 Lacs. Thus Amount remains from Sale proceed is Rs.49.25 Lacs.
    2. Now i am purchasing new flat in Joint name with my wife . Wife’s name is first in this deal . The Cost of new is Rs.73 lacs+ Stamp duty Rs.5 Lacs+ Agent fees Rs.0.85 Lacs+ Society Charges Rs.0.35 Lacs+ Mhada Charges Rs.0.35 Lacs. Total Cost is Rs.79.55 Lacs.
    3. We are palnning to take Rs.30 lacs hosuing loan on Joint name and also needs to incured Rs.7 lacs twoards repairs and renovations of new flats .
    Request you advise :
    1. My LTCG laibility if any , caluclation
    2. Can i invest in my home in our joint name – wife name is first
    3. Can i claims / show expenses made towards repairs and renovaction for calculating LTCG. What types of proof required for the same . we can take new quoation and cheque payment will be follow.
    4. For taking benefits of agent fees what proof required . Is only cheque payment suffix

    Thanks

  81. Dhwani says

    I had received an allotment letter for a residential flat under construction in Feb 2010 and got the possession of the flat in Dec 2012. The flat has not yet been registered ans I am planning to sell my flat in March 2013. Please confirm if the sale proceeds can be considered for LTCG as the allotment was made in Feb 2010 and sale is in March 2013 i.e. after 36 months

  82. Dipak says

    The assesse also has the option of not opting for indexation and the long term capital gain tax in this case shall be 10%

  83. Dipak says

    If indexation is not opted how LTGC is calculated in case of a sale of Plot.
    I Have come across a Web link (http://www.charteredclub.com/capital-gain-tax/) which states that

    the assesse also has the option of not opting for indexation and the long term capital gains tax rate in this case shell be 10%

    dose the above statement has support from prevailing tax rules
    Regards
    Dipak waishampayan

  84. Pijush Kanti Saha says

    Dear All,

    I purchased a flat at kolkata & the sale registration done on dated 4th July’12.

    Purchase amount-1434000
    registration amount around 2 lakh.

    Now I want to sale the flat for 22 lakh.
    Can anyone tellme how much tax I have to pay.

    Pijush

  85. naveen says

    i have sold a property on 15th Feb 2013 for rupees 40 lac possession of property given. the said property is a residential house came from will of my grand mother which was originally bought for rupees 50000/-, construction done for five lac in 1985. the sale proceed are rupees 25 lac received on 15th feb2013 and i have also paid for registry charges which was 2,50,000 thousand rupees mentioned in registered sale deed. rupees fifteen lac received via pdc for 5 lac on 15th April 2015 and 10 lac on 15th Nov 2015 mentioned in registered sale deed.

    when will capital gain arise and at what amount?

  86. Joseph says

    My mother has sold a property and to avoid LTCG Tax, she want to purchase a flat in my name. Can she do so. Can she buy flat in my or sons name by the capital gained. she is old and does not want to buy on her name. Pls advice or alternative

  87. Rahul says

    Hi,

    I am planning to sell a flat purchased in 2002 and planning to use a portion of sale to repay my existing loan. So as I understand CG will be applicable on profit and that needs to be either taxed or reinvested in property where as base (indexed) cost can be used for my loan repayment, am I correct?

    Thank you for your inputs and help in advance.

    Regards,

    Rahul

  88. Sunit says

    Dear sir,
    i purchased a residential land in march2006 for rs 457563 and i sold it on jan2012 for rs2469400 its cicle rate is 2748000 and i calculated ltgc is 2025290. is it correct? and i reinvested it in resid flat in april 2012 by purchasing 2471040rs flat. is there any tax which i have to pay? if no how to show in itr4 form please claer me. thank you. i am in business of prop and partner in another firm. its urgent because i have to file return. Please help.

  89. RAO says

    Very good article.
    My doubts are
    If a plot purchased prior to 1981 is given for development today and the owner will get two flats to his share2 yrs later what is long term capital gains tax liability—
    1. If he sells one or both immediately
    2.ifhe keeps both to let out for one or two yrs .
    3. does he incur liability on the date he takes possession as IAm told? Or only when the flats are sold since there is no transfer of property till then
    3. Can he claim one one or both as reinvestment in house property( he has one house already )
    4. If he gifts halfof it before entering into development agreement to his son(only one son and daughter )and can his son claim exemption by treating his one flat treat as reinvestment in house. If he sells or lets out
    5. How to save liability wholly or partly
    Please Advise -matter urgent
    Thanks

  90. sajid shaikh says

    Good Morning,
    I Purchased a flat in 2004 for Rs. 7 Lakh in Navi Mumbai (my dad is the co applicant) and i am still paying the home loan and now i am getting a offer of Rs. 47 Lakh for the same. I wish to purchase a new house of around Rs.50 Lakh by selling the old property and a take home loan again for the balance of Rs5 Lakh. The proposed buyer of my existing property is planning to take a home loan of Rs.35,00000. So do i need to pay long term capital gain, if yes how much. Please suggest as how i can smartly save on LTCG or what should be my plan…
    Please Please Assist me.
    Sajid…..

  91. S.Khatwani says

    Sir,

    I had purchased a flat in October 2009. Builder will give the possession of the flat in March 2013. Agreement of sale has been registered in Nov 2009. Sale deed shall be made in March 2013, which need not to be registered.
    I sold my old flat in January 2013.
    Can I avoid CG Tax.

  92. sanju says

    Hello,
    I have one question reagrding the CG tax.
    i Purchased a plot in 2001 for Rs 13 lacs. I didnot get the possession of that plot. i sold the plot using Power of Attorney.
    I sold the plot in 2012 Mar for 80 lacs.

    After that i invested the money buying five different residential plots. 3 of which i am still waiting possession.

    1) 13lacs
    2) 12 lacs
    3) 15lacs(still awaiting possession)
    4) 15lacs(still awaiting possession)
    5) 15lacs(still awaiting possession)
    and have 10 lacs cash in bank.

    Please provide your input on what my CG tax obligations might be.

    Thanks
    Sanju

  93. AK says

    Hi,

    I’ve recently sold my property with LTCG. Will i be exempt of tax if i show this money being invested in a new property registered in wife’s name?

    Thanks

  94. Siddhartha says

    Dear Sir,

    Can we convert a residential house claimed under section 54F to a commercial use after 2 years without selling or transfering to other parties, will this affect the claim made under 54F.

  95. pamin says

    Hi,

    I have inherited some 10 Lakhs Rs worth of Stocks from my father. This is the price as of now. I am not sure how much was the Book value of this stocks, i just know the current market price. Hence, i don’t know how much profit i’m making if i sell this.

    The question is – If i sell these stocks right away, do i incur taxes if so how much? i need to distribute these amount in my two siblings as well. Is there a way if i keep these shares for a year and then sell so that i don’t need to pay any taxes? Any clarification of how much tax i need to pay will be available.

    Thanks
    Pamin

  96. NM says

    hi,
    I purchased in August 2006 an under construction property from a seller and it was transferred in my name in books of builder. No registration with governement is required in Gurgoan. I took home loan on the property from HDFC. builder called for payment as the construction was progressing.the property was sold in October 2012 while it was still under construction. the new buyer also took a home loan for the property.
    a) will the profit on the transaction be LTCG?
    b) If yes, will it be entitled to indexation benefit.
    c) if indexation benefit is available, then can i take it be applied to all the payments made to builder over the 5 years period (2006 to 2012) and also on the interest payment on home loan.

  97. umapathi says

    i was having one plot purchased in 1994 and now i have sold the same. I am in look out of some flat which will take some more time, say 3to6 months. To avoid capital gain whee i have to invest and there should not be lock in period?

  98. MOHAMED says

    Hello,

    I bought a property in 1998. I want to sell it now. What was the CII in 1988 ??
    Please let me know so that I can calculate the LTCG.

    Mohamed

  99. Arpita says

    Hi,
    My father in law owns a house, built 20 years ago and want to sell it and invest in a new property jointly with son. However, the bank is declining a loan to him because of his age (80+ now). Can he still sell the house and invest in the residential flat that will be bought by his son (since my father-in-law is not considered eligible to be a co-applicant on a loan) and avoid capital gains tax? Please advice in what way he can save paying capital gains tax?
    Thanks

  100. Narendra says

    Hi,
    I purchased 1bhk flat (in Pune city) in july 2003 for 5,20,000/-. Now I am going to sell the same before 30th march 2013 for 25,00,000/-.

    Meanwhile I purchased a new redy possision 3bhk flat (in pune city) on oct. 2010 for 43,00,000/-. for this purchase I took bank loan of 30,00,000/-.

    My question is If I use all LTCG amount to repay the loan in the FY2013-2014. Can I get exemption from LTCG tax?

    waiting for reply.
    Thank you

  101. Rahul says

    Hi Bhavnoor.

    If there is any transaction in my bank saving account of Rs. 1500000 or more in privious years and my file is under scrutiny at income tax department, then how can I make my tax exempt on such transaction??

  102. UJJWAL says

    My mom selling her house at a price of Rs 16,000,00. and she is an age of 60 Years.The house was purchased on 1987 at a cost of Rs 59000. So clarify me whether she falls under LTCG and at what amount and how much she has to pay if she is not purchasing a new property.

    Ujjwal

  103. anupama wakkar says

    Dear Sir,
    I am a retired female senior ciiitizen. My son purchased one flat in 2006 in navi mumbai. As he is trasferred to pune now in 2012 we sold the flat. When he purchased the flat his salary was not sufficient to get housing loan of Rs, 12 lacs, so I became a coowner as that time I was emplyed. Therefore, the flat was in joint name as first name of my son & I was second. To facilitate his buying I also gave him Rs. 5 lacs to help him buy & decorate the flat.
    Now the flat is sold. can my son alone claim the Capital Gain Tax exemption? I have only one son & now I am rfetired & pensioner.
    Please advise.
    ANUPAMA wAKKAR

  104. M FAREED says

    Hi, i am owning a plot in Bhopal which i bought in 1993 for Rs45000/- . Now present price of this land is 37lakh. If i sell it now what will be capital tax amount?
    How can i save the capital tax amount. I want to buy a flat (30lakh) and a plot (8 lakh) for my wife and daughter. can it save the tax?

  105. ajit says

    Pl let me know the specific section under which i can buy two residential houses against CG

  106. Pravin says

    Dear Sir,

    1-I have a flat that I purchased in 2003 for 10,00000 rs.
    2- Now in 2012 I have purchased a new property/flat for Rs 90,00000 Rs.which is under construction .this amount being paid slab wise as per the demand from builder. Expected possession of this new property is in Mid 2015.
    3-Both above amounts are without registration fees.
    4-Kindly advise if I sell my old property say for 60,00000 Rs in coming years say in 2013/2014, will I have to pay LTCG tax.
    5-When should I time the selling of old property to save on LTCG tax
    6-Pls advise what is the meaning of
    Purchasing new property – is it mere registration of the property as the property is under construction or I have to take physical possession and property should be ready to dwell.

  107. minakshi giri says

    Hi Bhabnoor,
    Thank you for glorifying our knowledge on capital gains. We have a flat in the city which we are to sell in 2013. We have already started constructing a house in our native place , in remote village. The construction will be completed within one/two year after sale of flat by using the capital gain part.
    1) whether any tax is attracted?- if yes ,how much?
    2) if not- what proof i have to keep and submit as construction cost?

  108. nishikant says

    Dear Mr. Bhavnoor
    I have two queries.
    1. In your reply to Soumya (13 may-21 May) and Shital(29June-3July) that the LTCG can be invested in more than one property. But section 54 say “a prpperty”. What is the interpratation by ITO
    2. I am expecting LTCG which I want to invest in new propery purchased jointly with 2 more co owners. Will my exemtion will be limited to 1/3th cost of new property or the actual amount I pay?

  109. sudhir says

    I have flat (buy – 2004), which I am selling in now& I am expected to gain 50 Lakhs from this property. I had a loan in my name on this property, which I closed two years back.

    This property is jointly held by my wife (primary holder) & myself. I need to save maximum tax saving by investing into another property

    1. Can law allows me to invest whole 50 lakhs to purchase another (residential plot or flat) with only in my wife’s name (house wife) & hence I don’t need to file tax return & detailing out LTCG in my. return? Can she file the tax return & claiming all the 50 lakhs as LTCG for herself?
    a. My intention to buy another property in my wife’s name is to avail benefits in future Rental income, which she can claim 100% as her income & thus I can save tax by not showing rental income in my overall income. I am salaried employee

    2. What is your advice to save max tax benefit on LTCG? Shall we purchase another property jointly or only in my wife’s account?

  110. Anthony says

    Hi

    I find your information extremely valuable. I sold a flat and I have paid the brokerage in cash to the broker @ 2% which is their standard rate in Mumbai.
    Since he did not have an official sales receipt.
    We drafted one stating:-
    RECEIPT
    Received with thanks a sum of Rupees xxx in Cash as brokerage towards sale of flat from Anthony at the following address at the rate of @%
    The address is as follows:-

    xxxxxxxxxxx
    xxxxxxxxxx
    xxxxxxxxxxx

    Place:- Mumbai
    Dated:-
    xxxxxxxxxx
    Receivers Signature
    xxxxxxxxxx
    (Name of Receiver)

    My question is would such a tax receipt be ok. Please let me specify the amount was given in cash,

  111. Ankush says

    Hi Sir,
    I have query related to LTCG/STCG. My age is 59. My mother had purchased a land in 1999 of price 25000rps. In Nov 2012 she gifted me the land, Will and authority is given me to sell the land.Means from Nov 2012 I am the owner of the land.
    Now at present scenario land cost is 30lakhs. I want to sell the land as my daughter is getting married in feb 2013. I am getting 30lakhs for the land. 20lakhs I will invest in a flat whose possession I will get in March 2014 and 10 lakhs I want to keep as cash in hand for my daughters marriage. My question is:
    In which category I will come stcg or ltcg and how I can keep 10lakhs cash for daughetrs maraige. Is there any tax applicable on me.
    Plz reply sir. Tahnks.

  112. CA hari says

    Mr.Bhavnoor

    You have patiently responded to many queries. Responding to one of the queries and in your article you have mentioned that Long Term Capital Gain arises if the asset is held for more than 12 months. But you would appreciate that this is not the case for immovable properties which has to be held for a minimum of 36 months to qualify as a Long Term Capital Asset.

  113. rainbow says

    I have two apartments in Bangalore – Both apartment on name of me and my wife, Both co-borrowers.
    I am planning to sale one apartment that is not having any loan.By selling this apartment in Bangalore, we will construct house in Pune which will have name of only my wife. During purchase of apartment, all the financial transactions are done using my account only (and no money transfer can be shown using her account.
    1. How will I avoid the capital gain tax (house construction in Pune will have name of only my wife)?
    2. I don’t wish to invest money in bond etc since entire money is required in buiding new house.

  114. Praveen Atnoorkar says

    I purcahsed a appartment in 2002 where me and my wife are registered owners. we want to sale and plan to buy another one immeditely. Does the capital gain from first appatment considered as divided and since we buy only one appartment only one of us can claim LTCG benefit? How can we save LTCG ?

  115. saritha says

    Hi Bhavnoor

    Can we buy a second hand flat with the money gifted by my father , or is it necessary for it to be a new one?

  116. saritha says

    Hi Bhavnoor,

    My father in law has just sold a residential plot that was in his name and has decided to share the money amongst his 3 sons. We are planning to use this money to close our existing home loan , would any taxes be applicable in this case? If yes , can you please advise if we can use this money to buy another property and then close the existing home loan with money I plan to get after selling my wedding jewellery? Will tax be levied in this case?

  117. CJ says

    FACTS:
    1) A residential flat (‘old house’) is jointly owned by husband and wife.
    2) The old house is sold and LTCG have been generated
    3) The husband and wife intend to buy 2 adjacent residential flats (‘new house’) intended for residential purposes only.

    QUERIES:
    1) Whether S. 54 exemption is available to both husband and wife ?

    2) Quantum of exemption (Assume CG < COST of new house) ?

    3) Whether any clubbing provisions will get attracted if the husband has paid consideration at the time of acquiring the old house?

    4) Kindly explain the tax implications seperately, in case -
    (a) The old house was acquired by way of inheritance
    (b) Husband paid for acquiring the old house
    (c) Husband and wife paid for acquisition of old house

  118. S K Dash says

    I think you are well within the date limits. The new property should be purchased within last one year of selling the old property . In your case its within the past one month . So you should be able to avoid CG tax.

  119. Grinij Haria says

    My uncle(blood related) purchase land in 1990 of Rs. 1,15,665. He constructed home on that. but value of house remains same on papers. He gifted this home to me AT 1/8/11 and i paid stamp duty of Rs. 1,76,000 considering house value Rs. 35,81,500 according to jantri. i sold this property at 1/11/12 of Rs.51,00,000. i’ve purchased one residential property of 13,75,000.
    how much income tax do i need to pay now. can i purchase some bond to save this tax?

  120. Ramesh Raina says

    Hi,

    I have bought one flat for Rs.50Lacs and taken posession in June 2012. Loan against this Flat is Rs.4100000 including insurance of 1 Lakh.

    Meanhile I intend to sell old flat in Dec 2012 where I was staying prior to shifting to new flat.
    Selling price of old Flat is Rs32 Lacs. I had bought this flat for 13 Lacs in June 2005
    I intend to prepay part of Rs.41Lacs loan of new Flat. Do i need to pay full Rs.32 lacs to save on LTCG. Can I pay Rs.25Lacs as prepayment of 41Lacs loan and use balance amount against interiors of new Home.

    Please advise.

    Thanks and Regards
    Ramesh

  121. Suresh says

    Dear Sir,
    I sold my house on 20th Nov-2012 at Rs. 13.50 Lacs, which was purchased on 2nd Jan-2005.
    One new house was purchased on 2nd Feb-2012 (registration date) with a loan of Rs. 20.0 lacs. Today my loan outstanding is Rs. 18.4 lacs.
    Question: (1) Can I repay the whole amount of 13.5 to my loan for the new house & can I get the exemption on the capital gain tax ? Within which period have to pay this amount, is there any time limit ?
    I will be heartily thankful by getting proper guidance.

  122. chethan says

    hi,
    we purchased a site in 2008 for 1lakh and sold it for 2lakh 60thousand in 2012.
    Now, we are planning to buy a site for worth rupees 11lakh. so could you plz let me kno how capital gain will occur and tax to pay?
    thanks in advance.

  123. TASDEEQ ANSARI says

    I Have sold a land Rs. 1200000/- and its land of my Father, My father transfer Me this land on 31.12.1997 , Now How many tax will we made on, Before transfer me this land apporox 50 year had my father

  124. m.j.menon says

    bought land 3500 sqft non agricultural) for 55000/ in dec 2003.
    only maintainence was done on it.
    sold in 2012 for 35 lacs.
    bought a old flat in 2012 for 23 lacs.repair works costed app. 4 lacs
    my capital gains and tax liability?

  125. Subash Panikar says

    My wife has sold a plot in Bangalore, we already have 2 flats in Bangalore given on rent in our joint name, Me being the first party, we also have a house in Mumbai where we are staying. can we invest ( buy ) the money received from the sale of plot in Bangalore in another property, either in Bangalore or Mumbai in my wife name as the first party. Please advise. How long can we hold the money in her Savings account.

    Many Thanks
    Subash

  126. S K Dash says

    Hello,
    I went through the section 54 of Income Taxt Acts. I have a confusion. For selling the old property, we take the registration date into consideration. But for buying the new propoerty, can you please let me know which is the correct date we need to take for calculating if capital gain has to be considered or not ? Is it Property Posession Date ? Property Registration Date ? Or Property Booking Date ? In my case I have already booked a property which is yet to be handed over to me and tentative date of registration will be in Q1 2013. But I want to see one of my existing houses to pay off the loan. I wanted to know until what time I have to sell off my existing propoerty to avoid tax on capital gai, Please Suggest.

  127. K.K.Subramaniam says

    My mother had expired in June 2009. She had a property in her name. We (5 siblings) had got it transferred in one of our brother’s name in July 2012 and got the property sold in Sept 2012.
    My brother had bought another property in Oct 2012 in joint name, with my sister as the first owner and brother as the 2nd.

    Please advise is there any tax implications on my brother.
    Regards,
    Subramaniam

  128. ramesh pandey says

    i bought residential plot 2005-6–fro rs 400000 now i want ot sell in nov 12 -on2650000,and want to reinvest the amnt in plot or agriculural land —-what will be tax how can i save

  129. C K Vaidya says

    My company is unable to repay bank dues. The bank is planning to recover these dues by selling land given as collateral for the loan. It is expected that the land will fetch Rs 10 lac against bank loan (including interest) of Rs 9.5 lac. My company had originally purchased the land for Rs 4 lac over 3 years back and its indexed cost is now Rs 5.8 lac. What will be the amount of capital gain on which my company will have to pay tax?
    Will the LTCG be Rs 10 lac minus the indexed cost of acquistion of Rs 5.8 lac? In that case, my company’s long term capital gains tax will be Rs 84,000 plus the cess whereas the bank may hand over only Rs 50,000 to my company after squaring off its dues. Where does my company find the money to pay capital gain tax?

  130. R.M.Patil says

    I have purchased flat in Banglore executing sale deed on 15th Nov 2012 for 34 lakh.I have sold old flat in Pune for 32 lakh (which was purchased in 1995 for 6 lakh) to raise funds for this purchase but sale deed forpune’s property will take place in Dec’2012 (i.e. later date). Whether I am liable to pay CG tax on Pune property as new property in purchased earlier?Whether it will be sufficient if date of receipt of partial payment is prior to new flat purchase date?
    Thanking you,

  131. Vijay says

    Hi Bhavanoor,

    We have sold a flat jointly owened by me and mother at 70 L. We have a LTCG of 45 L.
    I plan to buy new flat of 50L and leave rest 20 L for my mother.
    1) Would the LTCG of 45 L be completely shown used by me and no tax for my mother with MOU that I would invest the LTCG amount?
    2) If invested as above ,Would my mother also need to invest rest 20 Lin another propert or can she keep it for her medical expienditure and old age?

    Kindly Reply.

    Regards,
    Vijay

  132. Dron says

    Hi,
    I have a got a sum of Rs. 98,00,000 from selling my share in ancestral property in Nov’ 12. Capital Gain= Rs. 97,00,000 .
    I plan to either buy a builder flat or plot.

    After buying a property, when can i sell this new property to avoid any capital gain?

    Please guide.
    Thanks

  133. jai p bajpai says

    purchased a plot in june 1989 and sold it in 2012. want to pay the capital gain tax. within what oeriod tax has to be paid. pl guide.

  134. Subash Panikar says

    My wife has sold a plot in Bangalore, we already have 2 flats in Bangalore given on rent in our joint name, Me being the first party, we also have a house in Mumbai where we are staying. can we invest ( buy ) the money received from the sale of plot in Bangalore in another property, either in Bangalore or Mumbai in my wife name as the first party. Please advise.

    Many Thanks
    Subash

  135. jaychandra says

    HI

    I purchased a plot from Bangalore Development authority in 1999 and sold it now in october 2012resulting in Long term capital gain. Now I propose to invest in another housing plot in Bangalore. Now my querry is that within what period I should invest and is it necessary that I should construct a house on the new plot which I propose to construct.

    regards,

    jaychandra

  136. Teena Khandelwal says

    I have plots of my name before starting filing Itr. Now i have started filing Itr and want to sale my plots i want to know what will be the tax implications……

  137. DR GIRISH HARKUT says

    hi this is dr girish

    my father purchased non agri land of 5000 sq ft in 1971 . he expired in 2003, after that i transfered it to my name in 2006.

    now i sold this land in 2012 nov . how much capital gain tax i have to pay?

    what to do to save tax?

  138. Sanjay Ahuja says

    Hi
    My grandfather purchased a residential flat in 1970 in Mumbai for Rs. 45,000. The title was transferred in my name following his death (my father gave noc) in 2006. My parents and siblings are living in this flat while I am an NRI living and working in UAE since past 10 years. The property is going for redevelopment and the concerned builder is offering Rs. 2 cr. to each member of the housing soceity including me to vacate. I have following queries -
    1. How much LTCG Tax am I liable to pay?
    2. Can I get tax exemption if I use the sales proceeds to purchase property in UAE instead of in India, as I am planning to relocate my family there?
    3. Any recommendations on saving tax in this case?

    Regards
    Sanjay

  139. Gopinath says

    A very helpful blog, thanks. I bought a plot in my name in bangalore in 2000 @ 2 lakhs. Sold it for 19 lakhs in Oct 2012. Now upon calculation given here, I reached to LTCG of 34 lakhs, which I intend to invest in another property. My question is:
    1) Can I buy 2 different plots with LTCG of 34 lakhs, investing about say for eg. 17 lakhs each plot, to save tax in my name itself?
    2) Most of the apartments I am looking to invest in has a guidance value of 27 lakhs only, so should I pay tax on remaining 7 lakhs? Even though I am paying about 70 lakhs to the apartment, they are registering in about that amount they say.

  140. Saif says

    Hello Bhavanoor,

    Very informative and helpful site.
    I just had a query too.I am about to inherit a sum of Rs 1.8 Crore for sale of anscestral property in kolkata. I am currently based in bangalore and would like to invest the same in
    1) 50 lakhs in a flat to stay in currently.
    2) 50 lakhs in a plot and then within 2 -2.5 years would like to build a apartment with the rest of the money.

    So i hope i would be exempted from tax on money i got from sale of ancestral property.
    if yes (as far as i understood from the above cases, answer would be yes but) after 3 years can i have 2 residential property, i guess not , so in such a case what should i ideally do to avoid tax then?

    Thanks and Regards
    Saif

  141. Vivek says

    How is the holding period computed? Lets says, I bought a piece of open land (without housing unit) 3 years back ie., during Oct 2009. Lets say, the construction is completed on the open land in 7 months. Therefore, the total holding period is 3 years and 8 months. If I sell the same after construction, will it be considered as LTCG or STCG. I mean, is the holding period of open vacant land correct way to calculate LTCG or does the holding period include only construction completion date.

  142. Vinodananda Rao says

    Hi,
    I have sold my 12 year old property for Rs 30 lac in the month of sep -12. I was invested aprox. Rs 10 lac for the sold property in the year of 1999 – 2000 but i dont have any document for this investment. My question is how to show this in tax calculation.Please advice.

  143. Vishal Bhayana says

    Hi,
    My father bought a property for 4 lacs (registered value) in 2002 and now he wants to sell it and gift the proceeds to me. The registered value currently would be close to 18 lacs and i intend to use the amount for buying a property in my name. Can we somehow claim exemption of LTCG, since the new property would not be in my father’s name.

  144. Savithri says

    Hi Bhavnoor,
    My husband gifted half of his land which he purchased in 1974 to our daughter
    in May 2012 through a settlement deed. If both the portions of the land is sold before Dec 2012, will my daughter also be eligible for Long Term capgains exemption (REC bonds, reinvestment in another property, etc.)?

  145. shekar says

    Hi
    Father died without making any WILL. After death , we all transfered the flat in mothers name by an affidavit. Now we have sold the flat and single cheque is recd in my mothers name. Now we need to distribute the money within 5 heirs (mother + 4 siblings) . 2 heirs want share after deducting the tax , and 3 wants to invest in bonds or house. Can mother give the individual cheque to other four without deducting the tax and tell the sibling to pay their own tax.
    Or does mother have pay capital gain tax and then distribute the money.

  146. B Pereira says

    Dear Bhavanoor,

    I had bought a flat in Dec 2003 for Rs. 17,50,000/- and sold it in Sept. 2012 for Rs. 70,00,000/-. I already own one house in my name can I buy another one. What is the amount I have to invest in a new property. can you please let me know how much is the LTCG in my case. Thanks!

  147. Ravi says

    Hi!
    I am a NRI and funded my wife(home maker)for puchase of a plot in her sole name for Rs7.5 lacs in 2004.The amount was paid by way of D/D as per the corporations terms.
    The plot was sold in oct 2012 for a consideration of Rs90 lacs and the same was deposited in her a/c held single by her.
    We have booked two flats with each having the first owner as my wife and joint owners in one our elder son and in the second the younger son.
    The cost of each flat would be Rs45 lacs which will be paid from the a/c and flats completion period is nov2014 but registration will be done in Dec2012.
    assume the completion perion to be stretched for further 6 mths by what period we should disburse the money?
    Is this transaction ok to avoid any LTCG tax and do we have to open a CGAS and transfer the money?

  148. Sandesh Gaonkar says

    Dear Bhavanoor,

    I have purchased a flat in August 2008 for 17 Lacs and now I want to sell it for 32 Lacs.
    Also I am planning to buy new flat within 1-2 yrs. So I just want to know how much tax I have to pay if I sell it and will it affect the Tax benefit I have taken from last 4 yrs through home loan.

  149. Sanju says

    Dear Bhavanoor,
    I bought a flat in 2005 which I am selling this year. Can I buy two properties using my sale proceeds and save long term capital gain tax.

  150. Eliyas Firoz says

    i own a land which was bought three years before and now i am planning to sale the same (case 1), at the same time i own an another land which was bought one and half year back(case 2), now i need to know that if i sell the case 1 the capital gain/loss comes under long term gain/loss and in case 2 the capital gain/loss is short term. now if gain in case 1 and if i loss in case 2 then can i get tax exemption in both the case 1 and case 2

  151. Damodar Pohuja says

    I Need information on below
    1) Can I buy a new ready posesion property (Flat) before selling old (10 years) property (flat) say within a time period? If so what is the allowable time period to avoid Capital gain tax?
    2) I’ve also invested in an under construction property in 2010, which is yet to be delivered. Is this of any consequence to my buying an addtional property?

  152. Dr.Rao says

    Dear Bhavanoor,
    I have property which was bought in 1971 . In 1976 a new house was constructed on the same plot. I want to sell the property. How do I find the indexed value since the the table starts at1981-82 ? And also compute capital gains tax?
    Thanks.

  153. Deepak Jain says

    Dear Bhavnoor, are there any specific sections which delineate the basis of determining the date of asset acquisition?

  154. AMITABH says

    Bought a piece of land in Feb 2009 for Rs. 11 lakhs after taking a loan and sold in October 2012 for Rs. 42 lakhs. Paid the loan and remaining amount want to invest in two property i.e. a piece of land and a flat which is under construction and remaining amount again to be taken as a housing loan. Can I get the benefit of LTCG.
    Thanks

  155. Suraj P. Manchanda says

    I am worried about growing black money in property transactions. It is a common knowledge that if an honest person wants to buy a property in Delhi today, it is very difficult for him to do so without the involvement of black money. Sellers rarely agree to accept the entire sale money in white to avoid paying capital gains on property sale transaction, so he would prefer to have larger part of the sale proceeds in black. The purchaser is also happy to get the sale deed registered at lower value as he/she has to make payment of stamp duty on the consideration value shown in documents and not on the market value of the property. The difference between the ‘consideration value’ of registration and present ‘market value’ of the property at which sale deed is finalized is the black money and is generally paid in cash. This is how the black money is generated and how it is difficult for an honest person who cannot arrange black money to buy house property in Delhi/NCR. The government is also deprived of actual revenue collection from stamp duty and registration fee, if registration is not done on the present market price.
    Can you suggest a solution to prevent black money in property transactions and curtail corruption in India?
    Best regards,
    S.P. Manchanda

  156. rajesh says

    Dear Sir,
    If I sell my older plot and buy a new plot utilizing LTCG (LTCG<new plot cost) do I need to pay any tax?
    Also, Is it compulsory to construct house in new plot to save tax?

  157. nitin agnihotri says

    R/SIR
    my elder brother booked a flat in june 2009 in 13lakhs rupees .he transferred that underconstruction flat on my name in july 2011.i want to sell that flat in 23 lakhs and I will be going to purchase a new flat from that amount.flat that i want to sell is still under construction.
    my query is whether i have come under any tax liabilty by selling this flat or not?
    i am very puzzled as i am getting different views.

    thanks and regards

  158. Saravanan S says

    I sold a property and i know abt CGT ,after calculating the inflation ..index..I have a Long Term Capital gain tax for 86 lakhs. I want to know …whether i can invest in 3 Residentail Apartment which costs(45 Lakhs , 25 lakhs and 16 Lakhs ) respectively.

    In one of the article some one told ..only one property can be bought to avoid tax..

    Ref:

    http://www.caclubindia.com/forum/long-term-capital-gain-re-investment-192003.asp#.UHvu52_A9vA

    I am more confused…..pls help

  159. Rajesh says

    Hello

    I bought a flat in 2009 April for 40 lacs.. am selling it now in Oct 2012 for 50 lacs..

    Am is supposed to pat LTCG tax? I am planning to buy another house in an years time.. still do i need to pay the LTCG tax?

    Can i put this money in FDs till i buy a new house in another year or so? Kindly suggest.. If experts reads this post, please reply. Much appreciated.

  160. Shreya says

    As per my understanding, only one residential property is permissible for adjusting the LTCG.

  161. Harsh says

    Hi,

    Can I save capital gains tax by buying 2 residential properties costing a total of 1 Cr to adjust long term capital gains of 1 Cr accruing from sale of my bungalow . Is it necessary to buy only 1 property to adjust the capital gains?

    Pls clarify.

    Regards

    Harsh

    Regards

  162. Prathima says

    Hi,

    My aunt just received her share of the sale proceeds of her father’s very old house. Her father did not leave a will and hence the sale proceeds were distributed among all the children. How does one compute LTCG in such cases. Year of construction and cost not known. She did not own any portion of it and just received her share on sale. She is a senior citizen and plans to invest it in capital gains bonds. But how much shoudl she invest?

    Pls. do let me know.

    Regards,

    P

  163. baldev singh says

    Dear Bhavnoor
    I have a residential plot on lease for 999 year in one of the housing societies registered under maharashtra socities act. I have been paying to the society since 1998 in instalments as & when they ask for ,but over the period these are either development or maintenace charges. I am now selling the deed through society for 4400000/-& i want to invest the amount in buying a flat under construction at hyderabad almost for 4400000/- I would like to have your advice as to what would be my capital gain liability

  164. says

    Dear Sir,

    I have 10000 rs listed share and co. buy back my all share .

    will capital gain arise from this transaction?
    Q 2 If self occupied property loan afetr 1 april 99 2000000 @ 10.00 payment within 6 month of the financial year.

    what will i get regarding post interest(financial) 20000 or 10000 ?

    I know i will get pre-construction but i am confusing only current interest deduction.

  165. Parvati says

    My father was allotted a leasehold DDA flat the payment was made by him in installments.Now after his sad demise all the legal heirs want to give No objection Certificate in my favour for Registration of the said property in my name and its sale thereafter.
    Now my questions are:
    What will be the tax implication if the property is disposed off within one year of its freehold/registration?
    What will be the tax implication if the property is disposed off after one year year?
    Can another property be purchased by me after one year for utilizing the benefit of long term capital gain?
    Any other procedure under Income tax Rules for getting benefit of LTCGT.

    Thanks.
    Parvati

  166. Lily says

    Hi Sir/Madam,

    Can we use the money gained from property sale for repayment of home loan to avoid capital gain tax on profit earned from sell of flat.

    Both the properties are bought and sold in same financial year?

  167. manish says

    I have a flat in pune which i booked in jan 2010 but registration done on aug 2012.
    Now i am selling the flat at 32 lakh which was taken at 25 lakh + 1.5 lakh of stamp duty.
    I have 2 questions
    1. How can i save the STCG on this deal?
    2. I came to know that if i sell flat within 1 year, the buyer has to pay lesser stamp duty – do i need any special clauses in agreement with builder for this?

  168. Deepak Sabharwal says

    Hi Bhavnoor,
    I have gone through your earlier comments, but i have a small doubt which i liketo clarify.
    If i receive a gift cheque from my mother, which she has given to me by selling a property and inturn even I had purchased a property from that amount on my name.

    My ques. is – Does anyone of us i.e my mother or I, have any tax Liabilty due to selling of that property?

    Thanking you,
    Regards.

  169. Sumeet says

    I bought my second flat (an under construction flat) in Oct 2010 and got possession of the same in Nov 2011. The flat was registered in Nov 2011 itself.

    Now I have sold my first flat in Oct 2012 and will like to save my long term capital gains tax by making partial principal prepayment of home loan on my second flat.

    Please let me if I will be eligible for the tax saving.

  170. Sumeet says

    Hi Bhavnoor,

    Please clarify what do you mean by your response to point (b). What will be the date I own the second house out of the following options –

    1. Date of builder buyer agreement of under construction flat.
    2. Date of allotment letter of under-construction flat.
    3. Date of offer of possession of the flat by the builder demnding final payment.
    4. Date on which Sale deed is registered after getting the possession certificate.

    Regards,
    Sumeet

  171. S K Jain says

    Sir If i sell a residential house owned jointly with my wife.Can me & my my wife divide the proceeds and purchase two separate residential properties each in our individual name and still claim exemption from LTCG tax on the property sold.

  172. Naveen Magu says

    Two brothers own 2 Residential Houses, each one having 50% share in each house. One brother has sold individually owned a plot of land. Can he save Capital Gain Tax by re-building one of the two houses which has 50 years old construction under section 54-F?

  173. shivangi says

    if an assesee buys an under construction property in Feb 2013 whose possession he will get in Feb 2018 when should he sell his existing house property to claim deduction u/s 54 and set off the capital gains?

  174. sriram says

    Hello Bhavnoor
    I have been reading ardently all your views on CG so far.

    I will be selling my flat in a next month or so and planning to construct a house on a plot which is in the name of my father.
    I don’t intend to get a gift deed for that plot from my father.

    Do you think i will still have to pay tax on CG, even though i construct on the plot belonging to my father, within a year or so ?

    Eager to hear from you
    Regards/Sriram

  175. says

    Hi Bhavnoor my question is
    My parents had sold there property and (Property sold before 31st march 2012), i have transferred the amount into capital gain account(31st July 2012). As of now we are staying jointly. I have purchased this property where i am the first owner and my mom is the second owner. Before selling the first property we intended to buy a bigger property by selling the both property. But now we don’t want to coz of financial issues. As i have transferred the money in capital gain account what measures/steps i can take to avoid 20.6% tax burden. Can i invest now in bonds ? Please guide me

  176. Narasimhan says

    Dear Bhavnoor

    If my mother sells a residential property in her name resulting in capital gains (LTCG) after indexation, can the gains be exempt from tax, if she buys two residential properties but registered in sons’ name…Does she have to buy two houses in her name and gift it or can the property be directly registered in sons’ name.

    Thanks.

  177. says

    there is a property holded by my father’s mother, she is my grand mother my father wants to transfer it to my name . im married . we are 3 to my father siter and i and my brother. there is any effect of law when i hold this property. and if i registered this how many days after i have to sell this property?

  178. suny says

    Madam/Sir, My grandfather gifted me plot (Non-agricultural)of 800 sq.mtr.in 1999 by registered gift deed. It is mentioned in this deed that the market value of the said plot is Rs. 3,00,000(three lakh). Actually, my grandfather purchased agricultural land of 2 hactor in 1980 for Rs. 50,000 and gradually spent money for the development of the land(levelling, cleaning, blocking the holes and riverstream,etc..).He spend money of approx. Rs.1,00,000 before making application for NonAgricultural plots. The total plots of 8000 sq. mtrs. (10 plots of 800 sq. mtr. each) were sanctioned by govt. authorities in 1989. I SOLD My PLOT OF 800 sq. mtr. in August 2012 for Rs. 4,50,000.
    1) capital gain is calculated on the market value mentioned in gift deed i.e. Rs. 3,00,000
    OR
    ii) capital gain is calculated on the cost of the plots(8000 sq.mtr.)of my grandfather santioned in 1989 and then bring proportionate cost to plot of 800 sq.mtr.
    PLEASE REPLY.
    Thanks.

  179. Gautam says

    I bought a flat in Jan 2009 for 18 lacs. I sold that flat for 40 lacs in May 2012

    The capital gain arising from this will be invested in new house property. By what time can i invest in the new house property ?

    A good builder has offered a good pre-launch plan and its possession is expected after 3 years. Although there is always some risk attached to pre-launch property.. what if the LTCG money invested in this new property gets delayed ? Can i book profit after 1.5 years if i am seeing delay and can i invest somewhere else inorder to take care of LTCG implication ?

    Or else i can go for a ready to move in property and can invest by LTCG there.. I am not willing to keep this property for more than 3 years.. Pls can you let me know if this property where i have parked my LTCG money can be sold before 3 years or 5 years alongwith its tax implication..

    Thanks a lot

    Gautam

  180. GULSHAN says

    pls tell me what do we do when capital gain is invested in the underconstruction property having delayed possession more than 3years.
    Gulshan

  181. Bala says

    Dear Sir,
    I have a residential plot.
    Recently, I have advanced for a flat jointly with my daughter and S-in-law. Though, I am planning to register the flat agreement by mid 2013, I would get the possession by end 2015 only.
    As I want to invest the 100% of LTCG from the sale of the plot (by mid 2013) into the above flat, kindly advise as to when I should plan to sell the plot, i.) within 1 year before flat registration OR ii.) Register the flat within 2 years from date of plot sale. Possession is taken as the time of property transfer since in Mumbai, the registration is done even though full payment is not done; one becomes absolute owner only when the flat is complete, all payments are made and corporation gives the possession certificate.
    Thanks in advance. Bala
    ————————————————–

  182. satyajit says

    I had brought a property in the year 2003-2004 @Rs.6.00 lac(including regd) and took a bank loan of Rs.4 lac @ floating rate of 7.0% p.a. As the rate went up to 15%p.a. I had to arrange some more money to reduce my principal. At present I have an outstanding of around Rs.3 lacs and still paying an EMI of Rs.4200per month.

    Now, I wish to handover the flat @Rs.14lacs, what will be my income tax ? How to save the tax?

  183. Shreya says

    1. I purchased one flat in City A in April 2005 for INR 13,00,000/-.
    2. I incurred registration charge & stamp duty of INR 70,500/-.
    3. I paid a brokerage of INR 26,000/- for which I do not have a bill.
    4. I spent INR 12,30,000/- in May-Jul 2005 for additions & improvements to this flat in City A, for which I do not have bills but I have bank’s sanction letters for INR 6,00,000/- for the same, balance amount having been spent out of my savings. I have my bank statements showing cash & cheque withdrawals during the above period totalling to this amount.
    5. I am selling this flat for INR 1,40,00,000/- during Oct 2012.
    6. I am paying a brokerage of INR 1,40,000/- for the sale of this flat.
    7. I am buying a flat in City B for INR 70,00,000/- being registered in Dec 2012 (inclusive of Registration Charges + Stamp Duty).
    8. I am buying a second flat in City B for INR 12,85,000/- which too would be registered in Dec 2012 (inclusive of Registration Charges + Stamp Duty).

    Q1. Which all components above can I include while computing Cost Indexation for flat in City A?
    Q2. Which all components do I subtract from the final amount received from sale of flat at City A to arrive at my LTCG and LTCGT thereon?
    Q3. Can I purchase two flats at City B out of the proceeds of the sale of the flat at City A and claim combined value as LTCG benefit?

    Regards

    Shreya

  184. Rajesh says

    Hello

    I bought a flat in 2009 April for 40 lacs.. am selling it now in Oct 2012 for 50 lacs..

    Am is supposed to pat LTCG tax? I am planning to buy another house in an years time.. still do i need to pay the LTCG tax?

    Can i put this money in FDs till i buy a new house in another year or so? Kindly suggest..

  185. Durga says

    I am a little confused about the section 54.
    1. I am an NRI
    2. I acuired a pice of residential land (not house) when I was an indian citizen (now US citizen)
    3. I am selling this land.
    4. If I purchase another piece of residential land (not house) with the proceeds from sale, does the LTCG apply?
    5. Will it apply if I but a house instead of residential land? Will the exeption rules apply?

  186. Sridhar says

    Hello

    I bought apartment in 2009 for Rs 29L and took a home loan of Rs 25L. and I have sold the apartment last month at Rs 35L . The new buyer paid 2 installments of Rs 3 L and 22L and balance 10l will be paid in October 1 st week and we plan to have the agreement done and registration after that. Can you let me know if with advance money can I repay part of my home loan and when I get the other 10l invest in Capital gains account and buy an apartment in December/January. Thanks to let me know if i will have some LTCG.

  187. Munendra says

    Hi,
    Help is required in calculating LTCG.

    My mother in law got a property after death of her father in law on 1984,I have a sale deed of year 1970 in which rate of property was 4000 INR.

    My MIL got terrace in that will and in year 2001 she constructed house which cost her around 6 laks INR.

    now in year 2012 she died and property is transferred to my wife , my wife sold that property in 32 lakhs in same year 2012.

    help me in calculating LTCG

    Thanks

  188. KG says

    I have sold a land plot (some other city)and gained LTCG.I am investing this money in second hand property.I will be the primary owner and my wife will be co owner.The satus of our other flats are as follows
    1. One Flat- Primary owner my wife i am co owner( in this we are staying)
    2.Another underconstruction flat- Myself primary owner,wife co owner,Possession not given(will be given next 8 months),85% payment done,Agreement for sale is done with builder.
    3.Another underconstruction flat- wife primary owner,myself co owner,Possession not given( will be given in next 8 months),85% payment done,Agreement for sale is done with builder.
    Can i get exemption on LTCG( for buying second hand property considering ownership details of our other properties,please note that i am primary owner in only one property)

  189. neeta says

    I had purchased the flat 2007-08 for Rs5.00 lacs
    now i am selling the same for 15.00 lacs. on the other end i am also purchasing a new flat and want to invest this sale amount in new flat. but somehow the money which i am suppose to get is delayed by 1 month and the one from whom i am buying the flat wants immediate payment. currently i am borrowing loan from a bank
    my question is can i repay my loan when a get this sale proceeds and will it be taxfree

  190. priya shah says

    Hi Jignesh,
    its a long term capital gain, and since you are not thinking to invest the sale amount or gain amount anywhere you are eligible to pay tax.

  191. priya shah says

    Hi Rakesh kumar,
    date of letter of allotment can be taken as base date,
    since you have invested enough money in bonds you dont need to pay any tax toward LTCG and dont even need to pay advance tax as well.

  192. priya shah says

    Hi Mrs fernandes,
    first of all the IT department will enquire the source from which you have invested in the flat. if at all department agrees with the explaination given by you then no worries for any amount you get out of its sale. since you are a homemaker they amy charge you for the entire 19lacs.

  193. priya shah says

    HI Cawas,
    only the amount you will spend on construction of house will be eligible for deduction. Again as per 54 F you need to invest the sale proceed and not the capital gain.

  194. priya shah says

    HI Shilpi,
    No since the old house was in the name of your father the investment should also made in his name only. and in your question it is not clear that money has been received from your grandfather or the house been received,

  195. priya shah says

    Hi Nithinyanantham,
    within 3 years you should utilise the money but still you need to refer the case to your tax consultant.

  196. priya shah says

    Hi Avnish,
    it will be a long term capital gain. An asset is considered from the date of its registration.

  197. priya shah says

    Hi Ros Nor,
    if new property is purchase before one year of sale of property then you can surely claim an exemption u/s 54F.

  198. Cawas says

    Hi Bhavnoor.
    I had purchased a house in 1992 for 7.5 lakhs, and sold it for 84 lakhs. After deducting expenses and indexation I have to make an investment of around Rupees 50 lakhs to save LTCG tax.
    Can I purchase a plot and construct a house on it for say around 35 lakhs and invest the remaining 15 lakhs in REC bonds.
    Please let me know.
    Thanking you in advance.
    Regards
    Cawas

  199. mrs fernandes says

    hello bhavnoor sir,
    my mom and me purchased a flat ( mom first name and mine second name in agreement) in april 2005 for 5 lacs in mira road, mumbai, we sold it in july 2012 for 27 lacs entire amount in cheque and deposited in the bank ( age 65 and age 33 years respectively)

    my husband took 19 lacs from the 27 lacs as down payment money towards buying a flat (withdrew cash 19 lacs from bank) and the rest white component husband took loan. my husband is first applicant and i am the co-applicant in the new flat. i am a homemaker and i have never filed returns before. 19 lacs being black amount paid towards reinvestment in real estate will it be counted, if not, kindly let me know the exact figure i will have to pay towards long term capital gains. also let me know the proper channel to go about paying the same. can i invest the same money which i have to pay as tax , in gov bonds?

    thanks a lot for your time and patience

    best regards
    mrs. fernandes

  200. rakesh kumar jain says

    Dear Sir/Madam,

    I have few queries & hope you can help.

    In your replies you have mentioned that for LTCG calculations, the registration date
    must be taken as acquisition date of house to reach to indexed price of house. I had purchased a flat in 1981 in Delhi in a Housing Society. No registration was being done for these flats. The only date available in papers with me are Allotment Letter date & Possession date. Which of these dates are to be taken for Indexed value of
    flat (sold in April 2012)?

    Another query relates to Long Term Capital Gain, 54EC investment & advance tax payment.

    If house property sold in April 2012 for 70L whose Indexed value is 55L (assuming base date as possession date) & investment in 54EC bonds is made for 50L by April 2012 end:

    1. How much LTCG Tax needs to be paid?
    2. Should I had to pay this tax fully as Advance Tax before 15 September even if I am a Senior Citizen?

    Your reply will be very helpful.

    Thanking you. Best regards, RAKESH

  201. Jignesh says

    Dear Bhavnoor,
    I purchased a flat in 2007 for around 7 lakhs. Then in 2009 i have purchased a second flat of around 25 lakhs. Now I want to sale my 1st flat. In this case there would be a gain as per current market rate. And as of now nither I am thinking to buy another flat after selling 1st flat nor to use that gain to finish my home loan of second flat. In this case how i can get tax exemption. Thanks!!

  202. Nikhil says

    Dear Piyush,
    there wil no LTCG in your case because the cost more then sell price.
    i.e. Cost=14,22,101 and sell price =13,00,000

    For any further clearification please mail to me.

  203. mohit says

    Dear Sir,My mother has sold residential house in may 2012 which was brought in 1975 and incurring capital gain of 70 lakhs.now i have following queries
    * she has not opened CAGS account and the receivings have been put in 2-3 different accounts in her name only ( please clarify if it is possible and if not what is solution available now)
    * she has purchased residential plot for which booking amount is paid in march 2012 and remaining to be paid in different stages till dec 2013. ( Please clarify we can avail LTGS benefit in this case).
    * Also there is one more residential house purchased in may 2009 in my mothers name for which house loan was availed from bank and still possession is awaited of that house.( please clarify whether my mother can use the sale money to clear the loan amount and avail the tax benefit).

    Thanks in advance

    Upkar

  204. geeta sahu says

    i mean, if my father-in-law dosnt take the new flat on his name, then will he have to pay tax for selling the old property?

  205. geeta sahu says

    my father-in-law sold a flat. he is investing the money he got from the sale of that flat into buying another flat. he wishes to take the new falt in my husbands name. will he have to pay tax for the sale of the old flat?

  206. aysha says

    my uncle and dad had purchased a land 1961 in surat..around rs6500. around 40-50 yrs back.. now in 2012 they sold the land for rs 11crore. my dad expired so d land amount is divided under my mom my brother n my uncle. my mom gets 3.30crore out of which she is buying a flat in mumbai of 1crore .. what are the ways in which my mom can save tax on the remaining 2.30crore.. and how much tax will she have to pay on it.

  207. Vinod says

    Dear Bhavnoor,
    It’s really an excellent information / query resolution from your side. Appreciate the same.

    I own resedential flat. I purchased new underconstruction flat in May 2012, for which possession expected in Mar 2014.

    NA Plot purchased in Aug 12, 2009- 8 lacs (Agreement date & value)
    NA Plot sold in Aug 16, 2012 – 25 lacs (Agreement date & value)

    1. How much is LTCG?
    2.I don’t want to invest LTCG in flat. Can I invest in NA plot / Agricultural land & by when? Will I save tax on LTCG then?
    3.If answer to question 2 is YES, how long I need to hold the NA plot / Agricultural land to avoid tax on LTCG?
    4. I’ve to declare property sell in IT next return. Is my undeestanding correct?

    Thanks
    Vinod

  208. amrita says

    dear sir / madam,
    i have sold a plot of land and got ltcg amount of 15 lakhs. i want to reinvest the amount in a flat costing 32 lakh and the balance amount will be made by my husband. so will the ltcg exemption will be valid if we buy the flat in joint name[with me being the the 1st or 2nd holder] or should the new flat be only in my name to avail 54f benefit.if joint holding is allowed whether i have to compulosirly be the 1st holder to avail 54f benefit.help in this regard will be very much appreciated.
    thank you
    amrita

  209. ravi says

    Dear Sir/Madam, I had purchased a residential property (property A) under my mother’s name (as a gift) in June 2008 for 6 lacs.I have also been paying for another residential property (property B) which is still under construction and will be ready by end of 2014. So far in 1 year I have paid around 38 lacs for Property B. I have a few questions regarding tax exemption and repatriation. Since the property was booked on my mother’s name (as a gift), can I still sell the property A (valued around 20 lacs) and claim tax exemption since I have already been investing in Property B? 48 Lacs have already paid so far for Property B. If that is possible, can I repatriate the money back to HK? If yes, to which account does the new buyer of Property A make the payment? Can it be done to an NRE account or does it need to be done to my account in Hong Kong? Reason for this is that I require cash urgently at the moment and hence the need for the sale here. Please let me know your thoughts on this. Thanks in advance for your help

  210. Shilpi says

    Hi,

    My father got a share when my Grandfather’s house was sold.
    He wants to invest it in a residential plot for which my mother will be the owner.
    Will that save my father from LTCG tax?

  211. Raja says

    This idea of LTCG is a myth in India. Let us assume one has a land he bought in 1990 for 1L and today he gets to sell it for 1.5C. These are not fictitious numbers! Now one might sell the idea that he can walk of with 1.49C which can be reinvested with zero tax or can pay 20% on the 1.49C. I have ignored the small portion allowable as indexation maybe a L more.
    Coming to the point, the problem is there will be hardly any buyer who will give you 1.5C in White. In the above example the typical price offered will be around 80L. You get another 70L in black. Now one might think one does not pay tax on it! Perfect, but where will you keep it. Okey if you buy another property you can dump in the black, but in reality if you want to enjoy the money you are gone to dogs! So in simple think about why you want to invest, not just simple LTCG tax which is not any big deal!

  212. Mandar says

    If I buy a flat with a bank loan now, and repay half of the loan from the money I will get from the sale of old house before March 31 2013, will the amount of loan pre paid to the bank be cosidered as investment in property in same financial year and will this pre paid amount be exempted from capital gains tax

  213. Mohan says

    Hi Bhavnoor,

    You have mentioned in the article that STCG is applicable if sold less than one year. I read elsewhere that it is 3 yrs for real estate. Which one is correct please?

    Thanks.

  214. Nithiyanantham says

    I had sold a land in September last year and deposited the money in a Bank under Capital Gain Tax Exemption Account. I have reinvested this money by booking a new flat under construction in the same city in Tamil Nadu. Now I am not interested in taking possession of the new flat due to personal reason. Nearly 90 % of the money has been paid to the Builder. The New Flat will be ready in 6 months’ time. If I cancel the Agreement with the Builder and the Builder repays the money back in my Capital Gain Tax Exemption Account, is it permissible to do so?
    If so, then within how much time I have to reinvest this money to aviod the Capital Gain Tax?
    Thanking you.

  215. lalit says

    its lalit.my father just get ltcg by selling our old house.if we use 25% of the gain for purchasing some dda commercial property,in that case ltcg will aply?

    thank you

  216. avnish says

    Hi Bhavnoor
    I have booked a flat in Oct 2010 under Flexi plan. I hope to get possession in Sep 2012. I intend to sell this flat after getting possession and book one or two more flats under flexi/clp plan. Pls suggest will it be considered LTCG or STCG? Is LTCG cosidered from the date of allotment or date of registration? How can i get the full tax exempt?

  217. kumar says

    Property details:
    The ancestral property of the year 1920 has been passed on to my grandfather’s generation in the may 2012 and my father and his two brothers received it in the month of august 2012. My father and his two brothers got 270 sq yards of urban land each. Now I wish to purchase the land of 270sq yards from one of my uncle [dad’s brother]. The present government value of the property is 27k per sq yard and the market value of the property is 60k per sq yard. So could you please clarify me the total income tax / capital gain that my uncle be liable to pay in detail. The property is in Andhra Pradesh. I would really appreciate your response. Please explain
    Kumar

  218. Vinod K. says

    Can you name some tax saving investments to reinvest (stocks, mutual funds, bonds or other secure investments) in India that would exempt LTCG realized from the sale of a residential property?

  219. R. Shankar says

    Well, a follow up question is what would be my CG and tax, if I bought a flat with my tax-free 75 lacs (in 2012) and sold it for 85 lacs after three years? Do I have to pay tax for the 75 lacs original investment (1991) along with the new gain (10 lacs) from 2012 at that time?

    Your answer is greatly appreciated.

  220. Ros Nor says

    Dear Sir,

    Will LTCG be applied in the case when a new property is purchased first and then another previous property(which was purchased 5 years back) is sold within the same year?

    Thank You.

  221. Nine Million Dollars says

    Thanks Shankar. Do let us know if you have any other query regarding LTCG on property

    Nine Million Dollars

  222. Bhavnoor says

    HI Satish,
    you need to have basic proofs for the construction as well as improvement. your mom can gift you the sell consideration but tax should be liable to her as she was the owner of the house..if you dont want to go for any bonds you can purchse new house with the sell consideration you will receive and you can put the sell amount to CAGS for within 6 months.

  223. Bhavnoor says

    Hi Deepak,
    you have to carry out the valuation form the professional valuers. calculate the indexed cost of the same .the difference between the sale proceeds and the cost as calculated will be your capital gain. This amount of capital gain can be invested in bonds of NABARD or NHAI.

  224. Bhavnoor says

    HI S S Raman,
    your capital gain very well be exempt provided you invest the whole sale proceeds into the new flat and the capital gain must be the long term.

  225. Bhavnoor says

    Hi Rajat,
    for the purpose of sec54F assessee can not own more than one house at the time of claiming exemption means assessee can own one house only and second the new one for the purpose of sec 54F

  226. Bhavnoor says

    Hi Harsh Vardhen,
    it will be a long term capital gain, your sell consideration is 75lacs so you have to invest the full amount to avoid the capital gain tax.

  227. Bhavnoor says

    Hi Salman,
    property held for 3 year or more will be treated as long term capital asset and capital gain out of its sale will be considered as long term capital gain.

  228. Bhavnoor says

    HI Yogesh ,
    it will be a short term capital gain.
    the amount of long term capital gain which you claimed u/s 54f will be chargeable to tax when you will sell the new property as well.

  229. Bhavnoor says

    Hi Mahesh,
    Date of agreement will be considered for 3 years.
    CII will be released till you sell the flat.
    only amount you invested in your name will be considered for the benefit of sec 54f

  230. Bhavnoor says

    Hi R.Shankar,
    your indexed cost will be 100000*785/199=394472
    so capital gain will be 15000000-394472=14605528
    if you invest say 75 lacs only proportionate amount will be allowed as exemption
    so amount of exemption will be 14605528*7500000/15000000=7302764
    remaining capital will be chargeable to tax.

  231. Bhavnoor says

    Hi Manish,
    In your case it is a short term capital gain so exemption u/s 54F can not be availed.

  232. Bhavnoor says

    hi rajat,
    interest on housing loan if you have not claimed u/s 24 then only it will constitute the part of cost of capital. in your case you need take indexation benefit. and the whole of the sell proceed you can invest in new house of which consrtuction should be completed within three years. If you sell the new property within 3 years then it will be a short term capital gain and the amount of LTCG which was exemt earlier will be chargeable to tax.

  233. Bhavnoor says

    Hi Sudesh,
    you can not avail the exemption on the new flat you booked because you have purchased it more than one year prior to the sale of your house. so to avoid capital gain tax you have to invest the full amiunt of sale consideration. you can surely keep your money in capital gain account scheme for 6 months.

  234. Bhavnoor says

    Hello Suresh sir,
    as per the calculation your total cost comes to 25000*785/100=196250 + 250000*785/223=880044 so it equals to after indexation 1076294 .
    so your capital gain will be 4500000-1076294=3423706.
    since sec 54F says only proportionate exemption is available so exemption in this case will be 2800000/4500000*3423706=2130305
    so you have to invest the remaining amount too to avail the full exemption.

  235. Bhavnoor says

    Hi Sukumar,

    the value as on apr 1981 should be considered and indexation should be done accordingly using the base index as 100 for 1981.

  236. Bhavnoor says

    Hi Gaurav,
    You can avail the benefit since sec 54F says purchase of residential property one year before sale aslo validate the exemption.

  237. Bhavnoor says

    hi Dinesh,
    you have to file revised return, but after confirming that u sold the property only before 4 months.

  238. Bhavnoor says

    Hi Pradeep,
    It depends on the property owned by you or partnership firm. if its owned by you then total tax liability should be borne by you only and in case if it is owned by both of the partners then tax liability also be divided amongst the partners. You can very well avail exemption by investing the sales proceed in new house on the condition that you dont own more than one house.

  239. Bhavnoor says

    Hi G R Krishnamoorthy,
    Total capital gain in this case will be chargeable in your brother in laws hands only. he can divide the amount of sales proceed by way of gift but tax can not be divided since property is in the name of brother in law.

  240. Dinesh Jenson says

    I made LTCG of nearly 75 lacs thru property (land) sale and paid Indian tax early this year. I didn’t have a plan to buy another property at that time, however, I am planning to by a villa- flat soon which would cost me almost 60 lacs. Is it possible to get a refund of what I paid (cap gain tax) four months ago from Indian Income Tax department by filing a return. I am an NRI and subject to US tax also. Any advise from anyone please? Your help is greatly appreciated.

  241. says

    Dear Sir,

    By selling a residential property (flat) can I invest the LTCG in buying a plot of land at prsent to be used in future to build a house?

  242. Gaurav Khullar says

    I have one house purchased at 18 lacs in feb 2009 at Jabalpur (M.P) and I have also booked one 2 BHK flat at Panvel Mumbai (under construction) at 27.7 Lacs. I am having a home loan from HDFC worth Rs 15 Lacs and one loan sanctioned for mumbai flat worth Rs 14.7 Lacs. Now I want to sell my Jabalpur house which would sell approx at 40 Lacs. How can I save the LTCG tax. Or shall I wait for some time to get possession of the flat ?

  243. Sukumar Debroy says

    I built house in india in 1978. I moved to usa in 1979. I am selling the house in October 2012. Selling Price is 7200000. I evaluated the b uilding cost of the house is 2000000.

    how much tax I have to pay.

  244. Suresh says

    Dear Sir,

    1. I had bought a site in 1988 for 25000 and constructed the house on 1993 spending another 250000. i have sold this for 4500000 this year and simulataneously bought a flat paying 2800000. I has also plan to invest in nhai or rec bonds of about 500000. I being a senior and as per calculation seems to tell me i will zero capital tax liability. Please advise if i invest money leftover to tune of about 1500000 in a fixed deposit without any tax or legal liability.

    Thanks for your help.

    -Suresh

  245. Sudesh Shah says

    Date 22nd Aug-2012.
    Dear Sir,
    I sold my house on 8th Aug-2012 at Rs. 14.21 Lacs, which was purchased on 22nd April-2007.

    One new flat was booked on 26th April-2011 (registration date) with a loan of Rs. 10.0 lacs. Today my loan outstanding is Rs. 7.4 lacs.

    Question: (1) Can I repay my loan Rs. 7.5 lacs of flat from capital gain of sold house?
    (2) How much I have to reinvest in property to avoid any capital gain tax?
    (3) Should I keep my money in capital gain deposit account if I plan to invest after six months or more time?
    (4) Can I pay Rs. 4-5 lacs to my builder for new booked flat?

    I will be heartily thankful by getting proper guidance. Please send reply to my email id also.

  246. R. Shankar says

    Thanks for many good information to general public.
    I am a US citizen of Indian origin. I had purchased a house plot in 1991 for about one lakh rupees which I am selling 2012 September for 1.5 crores. What would be the inflation adjusted cost of my investment of one lakh in 1991? Second, if I use a portion of the capital gain of this deal to buy a flat (50 to 75 lakhs), would that amount be exempted from CG tax in India?
    Being a US citizen, I am subject to another approx 15% tax for my gain to US-IRS. Can I get credit for this double tax situation from India if I repatriate the money?
    Your advise is appreciated.

  247. Mahesh says

    Dear Sir,

    1. I had bought a ready possrtion flat doing a part payment with a registered aggrement on 12th October, 2009 for total consideration of 29 lac. I had made the full payment on 2nd Dec, 2009 and got the possetion on 5th Dec, 2009 day. I am planning to sell the property immediately after it finishes 3 years (if possible in October 2012, for the cost of 47 lac). So which day should be considered to count the 3 years, the aggrement date or the possetion date?

    2. What would be my gain considered? Because I am planning to invest the gain in another broperty and we do not have the CII no for current financial year yet.

    3. I am going to immeditealy buy another big flat for 67 lac with joint name of my real brother. Can I avail the LTCG benifit? I am planning to take 50 lac loan. How much down payment should me and my brother do?

    Thanks a lot in advance for the help

  248. Harsh Vardhen says

    Dear Sir,

    I booked a 50 lacs worth of flat in 2008. It is still under construction and possession would well be given in another 2-3 months time. I have already paid 95% of total cost to the builder. I also took home loan for this property which I settled prematurely to the bank and that home loan is closed already. Now I want to sell it before taking possession. I could sell it in around 75 lacs and would like to invest entire amount in buying new property with immediate effect. In this scenario..what would be my STCG or LTCG status ? Will I be liable to pay any tax ? If yes then how can i avoid this tax ? Pls advise….Regards

  249. Sathish says

    Hi,

    I own a piece of land on my name only and want to construct a house. I do not want to add any other names as co-owners.

    My mom, a senior citizen, who is a home maker(no other source of income) holds a apartment and sought her consent to sell it to help me in constructing my house.

    Following are the details of the apartment :

    1.Year of Purchase : 2000

    2.Cost of Purchase : Rs.4Lac

    3.Year of Selling : 2012

    4.Cost of Selling : Rs.17Lac

    The LTCG when calculated comes to Rs8Lac approx.(17 – (830/406)*4L) = 8L approx.

    Following are the queries related to LTCG :

    1. Inorder to consider improvement cost in LTCG calculation, should there be valid proofs(like receipts from vendors) ?

    2. What are the ways in which my mom can provide me the full money from sale proceeds without having to pay any LTCG tax?

    3. If there are no ways, and if we do not want to invest LTCG amount(Rs8Lac) in Infrastructure Bonds / National highway Bonds, then how is the LTCG tax calculated?

    (a) Is it calculated at a Flat rate @ 20.6 % where by the LTCG tax in my case will be Rs1.7Lac (20.6 % * 8L)?

    (b) Or, Can Income Tax Slab rate be taken into consideration for calculating LTCG tax, i.e, as per Income Tax Slab, the LTCG tax can be calculated as below:

    8L – 2.5L = 5.5L = 5L + 0.5L. Hence Tax = (10% * 5L) + (20% * 0.5L) = Rs60K ?

    4. Is it mandatory to put the LTCG amount onto CGAS account? If so within what time after sale proceeds we have to put it?

  250. Bhaskar Deore says

    If father sells his flat and earns long term capital gain, and he wants to invest this money in the flat to be purchased by his son, then is his father is liable to pay the tax on LTCG.
    Thanks.

  251. Rajat says

    Hello,

    My fathers had purchased a land in my name in 1989. I have sold this land in 2012. I already have two residential property in my name in the city where I had sold the land. But still haven’t got possession or registered the other two properties. I am interested in buying a new residential flat in another city and also investing in NHAI/REC Bonds to save the remaining.

    Please advise under what section (54F etc) or how can I save on LTCG. Would it help me saving LTCG by buying this third new property and also investing the remaining in bonds. ?

  252. S.S.RAMAN says

    1. I have land property in my name.
    2. I have a flat in my name.
    3. I have a flat in my wife’s name jointly with me.

    If I sell the first property in joint venture with builder and invested in flat in my name will exempt LCGT.

  253. Pratik says

    Dear Bhavnoor,
    I and my mother are in the process of selling some ancestral land that we inherited from my father’s family.
    To avoid LTCG tax, she and I plan to buy an apartment each.
    My question is: Can my mother make my sister and me co-owners in the new property she buys from the sale proceeds ? Would the IT department care that my sister hasn’t put a single rupee in the purchase, or why should I be named as a co-owner since I’ve bought a flat of my own?
    I would appreciate a clarification.
    Thanks
    Pratik

  254. Deepak Sharma says

    Hi Bhavnoor,

    I purchased 100 sq.yard piece of land on 30-8-90 for Rs40000.00 and contructed a single strory house and property is in my wife’s name.We do not have any papers to support construction cost. We moved to Canada in 2002 and now having a canadian citizenship with OCI. On 16th april 2012 sold this house for Rs3235000.00. We want to save tax, can you suggest how much money we should put in Govt bonds and do we need to file tax return after investment.
    Thanks for your help.
    Deepak Sharma

  255. Salman says

    Hi Bhavnoor…read all the questions and details and was left a bit confused as there are two different facts being asserted on this forum…

    My question is LTCG is applicable on sale of property held for more than 1 year or 3 years ?

    Thnx

  256. yogesh says

    I had purchased a property in 2006-07 and sold it in 2011-12. The capital gain after indexing the cost was around 25000. To save on the capital gain tax in year 2011-12 i showed another property which i bought in feb 2010 against the 1st property while filing my income tax returns in July 2012. Now due to some circumstances i need to sell this second property also. This was bought in 31 lacs in year 2010 and would be sold in 37 lacs in aug 2012. Can i save the capital gain tax on this 2nd property, as i have already showed this as an investment to save tax on 1st property? If yes, will it be under Short term or long term capital gain? Please help. Can the income tax return which i already filled online in july 12 can be altered?

  257. Manish says

    Dear sir…

    I have purchased a flat in Mumbai from builder on 1.11.2009
    Worth Rs 38 Lakh..only allotment letter recd and no agreement done yet..

    Now I want to sell the Mumbai flat for 65 Lakh and buy a new Flat in pune for 60 Lakh
    For residential purpose and 5 Lakh for Furniture…

    What are the Tax implication for capitals Gains…

  258. rajat says

    Hi

    I need to sell one property in Delhi/NCR which I had bought for around 26 lakhs in 2007/08 -the total selling cost would be around 36lakhs . I had applied for 15 lakhs loan for the same and as of now ,the interest levied on the same is around 5 lakhs . So for me the total cost would be around 31 lakhs (26+5) ..thus will the capital gain be 5 lakhs or 10 lakhs as in my case ? Now if I invest the money in another residential property which is under construction and planned to be completed by 2016 – would this gain be exempted under Section 54 ??? Also , if I sell this new property in the next three years , then how much would the capital gain be (total cost of new property around 55-56 lakhs) ? Pls provide me details on the same.

    Rajat

  259. Pradeep says

    Hii
    Priya
    I have question I bought commercial property in the form of partnership firm in the year 1995 .now we want to sell this office and want to add this amount to buy residential apartment for both the partners with in same year .
    I want to know shall we comes in the capital gain tax bracket or not please explain us

    REPLY

  260. G.R.Krishnamoorthy says

    My brother-in-law has proposed to sell his house partly constructed 35 years back and partly constructed some 20 years back. He is aged 77 years. He has got his wife, two sons and one daughter. He has proposed to get the sale amount divided among himself and his sons and daughter. What is the tax liability in his case? In what ways he can avail of tax benefits. Please advise.

  261. Bhavnoor says

    Hi Sanjay,
    yes, u will be liable for the capital gain tax but if you invest all the sell proceeds in construction of house then no capital gain tax will be levied on you. you can surely keep the proceeds in capital gain account scheme till you start your construction.

  262. vindhu says

    hi bhavnoor,
    I’am building an apartment ,i will retain 2 flats and sell after 3 years only ,yes i will come under LTCG but do i have to pay vat and service taxes on the sale proceeds

  263. priya shah says

    Hi Summi,
    in your case this is a short term capital gain so you can buy new house and claim exemption. sec 54F is only allowed in case of long term capital gains.

  264. priya shah says

    Hi shobha,
    you can buy new house and claim exemption u/s54F, since you own only one house prior to this new house.

  265. priya shah says

    Hi Sarvesh,
    there is a short term capital loss in your case. and cost approves by govt officer can be taken into consideration.

  266. priya shah says

    Hi Rakesh,
    you can buy any house only condition is that you should put all the sum received as a sale consideration into new property u/s54 F.

  267. priya shah says

    Hi jatin,
    yes you can very well claim it but only after filing of IT return mentioning all the details.

  268. priya shah says

    Hi Umesh,
    cost of only 3000sqft will be considered and plus the construction cost of house you built will be considered.

  269. priya shah says

    Hi Partha,
    since your property is ancestral you will have to consider cost of acquisition as fair market value as on 1981 and then you can surely get the benefit of indexation.

  270. priya shah says

    Hi gv,
    expenses directly related to purchase of the property are allowable expenses so all the expenses narrated by you is allowed to be added to cost of acquisition.

  271. priya shah says

    Hi Avinash, first of all your capital gain in this case is 6 lacs (20-14) and you have to invest the whole 20 lacs in CGSA and in residential property.

  272. priya shah says

    Hi Rakesh,
    your whole capital gain will be exempt u/s 54F since you are investing the total sale consideration.

  273. priya shah says

    Hi Ashok Jain,
    Registration and stamp duty both can be claimed as a cost of acquisition. and your further improvement also to be considered after indexation as far as you have bank sanction.

  274. priya shah says

    Hi Amit G,
    capital gain is surely the difference between the sale consideration and ur indexed cost. But you need have proofs of the payment.

  275. yusuf khan says

    Hi bhavnoor,
    I am NRI based in UAE, my native place is bahraich. I have one residencial plot in lucknow,which i bought four years back at around Rs.1.15cr, now i want to sell it, i am getting offer about Rs.2.45 cr for that plot. Now, problem is that, i own a property with 6more partner from my family in bahraich that is a cold storage. I take loan against cold store for construction and for business of cold store four years ago, Rs. 1.95cr is still due against cold store. I also got subsidy of Rs.50 lacs for cold storage establishment from govt. I want to clear the due loan of Rs.1.95 cr by the money that i will get from my plot.
    Now question is:
    How much tax i have to pay?
    How much money i will save in tax? that i am paying my loan against cold store.
    Is there any other way to save tax?
    Please help.
    Yusuf

  276. Anjaliswamy says

    Can i save on LTCG tax if i have purchased a site in the previous 1 year to this current sale date? Or can i purchase agriculture land and such purchase can be shown for LTCG tax benefit? Pls let us know.

  277. Vinod Bala says

    Hi Bhavnoor,

    I purchase flat for Rs.5,35,000/- in 1995 from Housing Society and sell my flat in November, 2011 for Rs.18 lacs. and buy one flat in January, 2012 from sister-in-law for Rs.20.60 lacs. but I paid the money to seller in 2005 and only paid Rs.40,000 on the day of sale deed in January, 2012. I took the possession of half flat in 2005 and half flat in January, 2012. Whether LTCG would be adjusted as per Section 54 in my case.

    Vinod Bala

    Reply

  278. sanjay says

    Hi Bhavnoor,

    I have purchased a large size plot 4 years ago and want to sell the half. With the sales proceed of the half plot which i sell , i want to construct a house. Will i be coming in capital gains ambit, if i am able to finish the construction of my house with in stipulated time (i.e. with in three years).pse advise.

  279. summi says

    Hi Bhavnoor,

    I have purchased a flat worth 16 lac 76 thousand( agreement done on oct 2010) possession given on oct 2011 and we sold it on april 2012 at the cost of 27 lac.We are putting this gain into another flat worth more than this gain so still we need to pay tax and if yes… at what rate or is there any way to save tax? kindly help.Thanks

  280. shobha says

    sir,

    i have bought a piece of agri.land for 2.5 lakhs in 2007.
    i got it converted in 2010. now i want to sell it for 45 laks.
    since i already have flat in my name, can i invest the proceeds to buy
    another house property to save the LTCG TAX.

  281. sarvesh says

    Dear sir

    My mother-in-law purchased a residential floor on 31.01.09 at cost of Rs 4,40,000/- including cost of registration. She spent 9.30 lakhs on onstruction and rennovation. She died on 05/03/09, therefore my wife acquired this property as inheritene. After death of my mother in law we searched the bills of rennovation and payments but could not find them. We approached to the govt approved valuer of property and the value of property was assessed as 14 lakhs.
    My wife sold this property on 14.10.2011 at ost of 13.50 lakhs.
    Kindly advice
    Type of tax liability, if any
    Valuation report of valuer is aeptable to assess the cost of property in absence of bills

  282. Rakesh says

    Hi Bhavnoor
    I plan to sell my double story house and wish to buy 2 low budget flat from my LTCG. Is that permissible in order to save tax on LTCG. Plz clarify..Thanks

  283. Punit Lakhiani says

    Hi again.

    I went thru section 54 and it’s not as simple to me as it seems.

    It says I can reinvest the amount in residential property / agriculture land within municipal area or within 8 kilometers of it where ever applicable.

    Does it means I can buy an agriculture land within 8 km. radius of municipal area?

    Also, from the section 54, I understood that I’ll have to move the money into Capital gain account before the last date of financial return… that for me is 31st of July 2012.

    And I have time to reinvest until 31st March 2013 (transfer date is April 1st’ 2011).

    A) What happens if I don’t buy anything before the due date?
    Also,
    B) what happens if I buy a house or land and sell the property within 3 years?

    What kind of obligations / penalties / tax I’ll have to bear?

    I hope it’s not too much…

    Pls help.

  284. Jatin says

    Hi Bhavnoor,
    I sold my inheritence property for rs 900000 in June, 2010 and deposited that money into a bank on 22 sep, 2010. Then i Withdrawal all my money from bank but deducted TDS of rs 1620. so what if i claim for TDS? do i have to mention all in my ITR in order to get refund. plz suggest me what to do? should i claim it or forget it?

  285. Umesh says

    1. Money earned by selling a residential house and invested in agricultural land, which later is converted to NA land & house built on it all within 3 years time. Can this transaction generate exemption on LTCG?
    2. Land purchased 10,000 sq ft & house built 3000 sq ft. Does the cost of 10,000 sq ft plot considered for exemption or only 3,000 sq ft of land?

    Thanks in advance.

  286. Shanta says

    Capital Gains

    In the year 1999, I had bought a flat in Bangalore. This was bought on loan thru HDFC. While I paid all the monies (initial and EMI), it was bought in the joint name of my husband and me. As it stands, the flat is free from all loans and is jointly held by us.
    Additionally, I have recently inherited 2 floors of a lease hold property (plotted house). Though the property is more than 25 years old, I have only inherited it 6 months ago. This is a 3 floor property and is located in NCR.
    Recently, a builder has approached me and offered to rebuild the property after he has acquired a floor (i.e. excluding my 2 floors) from my brother. He is suggesting that we collaborate and rebuild the premises at his cost as per the current bye laws. In lieu of this he has offered me 2 floors and some consideration (vide cheque). Currently, I stay and use both the floors of this property.
    My questions are:
    a)
    If I enter into this deal, will the consideration received by me from the builder attract long term capital gain tax? If yes, how can I save it as I also own a flat in Bangaluru.
    b)
    If I enter this deal and sell one of the two floors (i.e. retain only one)and then within the next few months buy another residential property equal to the sale price of one floor and cheque consideration, will it attract short term or long term capital gain? If yes, how can I save it as I also own a flat in Bangaluru.
    c)
    Should I sell my Bangaluru flat, will the consideration received by me from the builder still attract long term capital gain tax? If yes, how can I save it ?
    d)
    Should I gift/relinquish my Bangaluru flat to my husband, will the consideration received by me from the builder attract long term capital gain tax? If yes, how can I save it ?
    In short, what is the best option to save Capital Gain tax while keeping the transaction in cheque? (I also understand that the assessee should not own more than one
    residential house other than the residential house in which he
    has invested as on the date of transfer…This is bit confusing)

  287. partha says

    We have a plot sold in Feb2012, at 6,50,000. which was an ancestral property came thro heridtary transfer. No detaails of value of purchase (prior to 1950) .
    What woould be the LTCG on this?? Is it 20.6% of entire amount or any indexation benefitt is there?

  288. gv says

    Hi Bhavnoor,

    What are the deductions allowable while calculating LTCG tax. Apart from Indexed purchase price after factoring CII for that year, can we also reduce the amount paid against –
    1) Registration
    2) Stamp duty
    3) miscellaneous expenses like parking, maintenance fee charged by the builder at the time of possession,
    4) VAT, Service Tax,
    5) Brokerage
    6) Transfer fee charged by the builder (10% of the p.s.f. rate appreciation), etc.

    to arrive at the correct Capital Gain. Kindly let me know which is allowable and which is not. Many thanks!

  289. Avinash says

    Hi Bhavnoor,

    How does one account for indexation when opening the Capital Gains Scheme Account??? (CGSA)
    If I purchased a residential property for 10 l in 2007, todays indexed value is 14 l, and I sell the property for 20 l, my capital gain is only 8 l.
    To avoid LTGC Tax I am required to purchase a residential property worth 8 l or more.
    Does the bank know all the parameters and deposit only 8l in my CGSA and remaining 14 l in my regular savings account?

    Thanks,
    Avinash

  290. Rakesh says

    Hi Bhavnoor,

    I am planning to sell my commercial property(shop) which I bought in 2007 and book residential property(flat) with full amount which I received by selling commercial property. Will it be taxable?
    Buying price : 4 lacks (2007)
    Selling price : 15 lacks (2012)
    If I put complete 15 lacks in booking new residential property. Will it be taxable?
    Need suggestion on how should I go about it, So LTCG will be non-taxable.

  291. santanu says

    hi, bhavnoor
    Weather cap gain plus can be made for less then one year in state bank of india in Term Deposit form and let me know is sale deed is necessary to produce for making the cap gain plus scheme in sbi

  292. Meghana says

    I am a 58 year old lady. I have purchased a flat in Mohali in the year 2005 @ 3.60 lacs by taking a bank loan of 2.75 lacs . Now my son, working in gulf is planning to purchase a a House in Kerala by taking a bank loan . I would like sell my above flat and to contribute the proceedings of my flat to help my son.
    Since he is taking bank loan , the house must be in his name. Now my question is how can I proceed in the matter. Can I pay LTCG tax, if how much? The details are as under :-

    purchase price : basic Rs.3.60 + registration + CD charges
    Sellng price 23.00 lacs.

    please help me…..Meghna

  293. Arvind Kenkare says

    I am a 84 yr old senior citizen . 5 yrs back I sold my anchestral property in Goa and I bought 2flats, one in Goa and other in Mumbai in my name from those proceeds. Last month I have sold my 50yr old residential flat in Mumbai where I was the sole owner and now I am investing all the amount obtained from that proceeds in buying a new flat in my name. Under these circumstances do I still have to pay the tax to government ?

  294. Zulus says

    Hi Bhavnoor –
    this blog is very helpful.
    I couldn’t find the indexation value for FY-2011-2012/2012-2013. Could you kindly update?
    Also what percentage of tax gets applicable on LTCG if it is “gifted” to a family member?

    Many Thanks.

  295. Ashok jain says

    I purchased one flat in Feb.1994 for Rs.170000/- & incurred registration charge+stamp duty of Rs.20500/ whether I can claim Stamp duty & registration charges as cost of acquiring the property.Further I spent Rs,12000/ for addition & improvement for which I do not have bills but I have banks sanction letter for the same,can I claim this expenditure for calculation of capital gains after indexation.I sold the flat in 2011-12 for Rs.600000/

    Please reply ASAP.
    Thanks
    Ashok Jain

  296. Pradeep says

    Sir I have question I bought commercial property in the form of partnership firm in the year 1995 .now we want to sell this office and want to add this amount to buy residential apartment for both the partners with in same year .
    I want to know shall we comes in the capital gain tax bracket or not please explain us

  297. Sujeet says

    Hi,
    I have sold a land in May-11 and planning to invest the amount in a plot next week.
    1) If the land value < LTCG amount, can i invest the balance in another plot and still avail
    LTCG tax?
    2) Is it mandatory to construct a house if i buy a plot?
    3) Can i park the excess funds in a Capital Gains account and utilize it later to construct? If i do wish to withdraw for construction, can i just withdraw the cash from the bank to pay the Construction person?

    Sujeet

  298. Prasoon says

    Me & my wife bought our 1st house in 08/2008 in 18 lacks (with 10 lacks loan, which was prepaid in 2009). We bought our 2nd house on 07/2011 in 62 lacks ( with existing Rs 20 lacks loan) . we had booked another house earlier in 2006 for Rs 32 lacks ( with existing 23 lacks loan), The possession was not given by the builder for this 32 lacks house. Now builder has asked to get this (32 lacks house) registered in July/August 2012. Our 1st house is being sold this month in Rs 45 lacks. Kindly advice me to plan correctly also how to calculate gain. Thanks & Regards.

  299. Amit G says

    Hi Bhavnoor,

    I purchased a plot in 1978 for Rs 40000 (Forty Thousand Only) and spent 2 lac Rupees to construct it and it was registered in FY1983-1984. I sold it in Year FY-2011-2012 for Rs 24 Lacs.

    As per the Indexation for 1983-84 (index 116) and indexation for FY2011-2012 (index = 785), the indexed value of the house is
    2,40,000 * (785/116) = 2,40,000 * 6.76 = 1625000 (approx)

    Further I spent 1 Lac Rupees for constructing 2 rooms in 1991-92 (index = 199), the indexed value of the expenditure on construction is 1,00,000 * (785/199) = 1,00,000 * 3.944 = 3,95,000 approx

    Further I spent Rs 1.5 Lac in 1998-1999 for constructing 1 room (index = 351) and the indexed value of the expenditure is 1,50,000 * ( 785/399) = 1,50,000 * 1.97 = 2,95,000

    Total index value of the house is 16,25,000 + 3,95,000 + 2,95,000 = 23,15,000

    I dont have bills for the construction made in 1983-84 and also for adding rooms to the house as no private contractor provides bill to you for any sort of work.

    My question is:

    (1) On what amount I have to pay LTCG ? Is it on 24 Lacs – 23.15 Lacs i.e. 85ooo ?

    Thanks
    Amit

  300. Prasoon says

    Me & my wife bought our 1st house in 08/2008 in 18 lacks. We bought our 2nd house on 07/2011 in 62 lacks . we had booked another house earlier in 2006 for Rs 32 lacks, The possession was not given by the builder. Now builder has asked to get it registered in July/August 2012. Our 1st house is being sold this month in Rs 45 lacks. Kindly advice me to plan correctly also how to calculate gain. Thanks & Regards.

  301. Sriram says

    Hello Bhavnoor
    I have been reading ardently all your views on CG so far.

    I will be selling my flat in a next month or so and planning to construct a house on a plot which is in the name of my father.
    I don’t intend to get a gift deed for that plot from my father.

    Do you think i will still have to pay tax on CG, even though i construct on the plot belonging to my father, within a year or so ?

    Eager to hear from you
    Regards/Sriram

  302. bhavnoor says

    if you sell your mumbai flat for same amount , hence no profits therefore no taxes. and re investment is to be made of profit amount only to save taxes. you can go ahead with all your plans without worrying

  303. avi says

    Hi
    I purchased a plot in Jan 2010 for 11 lac. I sold it Mar 2012 at 18 lac. I had to sell due to some court case on the entire layout. I purchased another plot for 20lac. Still i have to pay tax for 7 lac considering i have invested all the gais in another plot? Its scary even to think paying 30% of 7 lac as I dont have money… Please someone suggest what should I do as my intention of selling with in 2 years was not to make profit..

  304. monika says

    I had bought a property in 2008 which i am planning to sell in 2012 and make a capital gain of Rs 30Lacs on the same. I plan to deposit the capital gain amount in Long term capital gain account so that the same can be invested in another property to save tax.

    I had also booked another appartment in 2010 for 85 Lacs, the possession of which is scheduled in 2014.

    The payment for this appartment is construction linked and I have paid Rs 15 Lacs from my own sources and Rs 40 Lacs from Bank funding to the builder.

    Can I pay the balance amount payable to builder from my capital gain to avail the capital gain tax exemption in this case ? Is there any other alternative available to save tax

    The appartment booked here will be owned and registered as well in my name in 2014 ( within 2 year of sale date), however the appartment was booked in 2010 and the builder buyer agreement was also signed in 2010

  305. P.S.Venkatesan says

    We have sold our heriditary property for 40lakhs. But the guideline value of the property is 80lakhs. We have registered the document for 40 lakhs in concerned Registrar Office. what will be the sale consideration for capital gains Tax. Please give me reply.

  306. shoeb says

    hi bhavnoor,
    im working in saudi for past 10 years and hav no idea about taxes from sale of property in india.can u plz help me in understanding the situation of taxes in buying and selling property in simple terms.i read yr earlier posts but it was above my understanding. my question is ,i had bought a flat in mumbai about 2 years back for 33 lacs as assessed by muncipal corporation or some authority which my estate agent informed me.now i want to sell it for the same amount to a friend to save the tax.the agent told me the flat is approximately the same value in government assessement.so i will not hav any tax to pay at all as i did not make any profit.also i will buy a house or land in nagpur within 1 month of selling the flat.agent also told me dat as i am nri i wont hav any tax issues whatsoever.all the money i get from selling the flat will be used to buy the property in nagpur.plz help in pointing out my mistakes ,if any,in these deals.thanks.

  307. Bhavnoor says

    Hi
    if you invest all the capital gain in two new houses you buy then you wont be paying taxes, keeping all the conditions in your case satisfied

  308. Bhavnoor says

    yes you can do the same and you will be eligible for benefit .. but in that case you might wil have to file return, you need to check with your local CA

  309. Bhavnoor says

    the new property you buy to save tax has to be residential … you can buy another in your name even if u already have one

  310. Bhavnoor says

    Hi

    1. You can invest the gain before due date of filing return for next year.
    2. Minimum is the gain amount
    3. You need to hole any property you buy for 3 years to being into LTCG bracket and is something you buy or sell in black..it doesnt attract tax

  311. shital says

    Hi Bhavnoor,
    My father owns a open plot which was bought nearly 30years back. He intends to sell it.
    My questions is : is it possible to buy 2 new properties at different locations e.g. one in pune and other in mumbai, in which my father will be the first owner in both cases and myself will be second owner in one case and my brother will be second owner in other case.
    By doing this, do i need to still pay LTCG?
    Please reply.
    Thanks,
    Shital

  312. Harish says

    Hi Bhavnoor,
    Can the Capital gain amount be used to purchase housing property on the dependents name for avoiding tax ?

  313. Vikas says

    Dear Bhavnoor,

    I have three residential properties in my name – two flats in Mumbai and one house in Lonavala. I want to sell one of my residential flats in Mumbai and purchase another flat in Mumbai itself using those funds completely, all during this year. I am a NRI and do not file returns in India.

    Question – Am I eligible for LTCG benefit under Sec.54 ?

    Please advise.

  314. krishan says

    Dear Bhavnoor
    I have a residential house and have a 50% share in a commercial commercial property in my name. Also my wife has a residential plot. Can my wife buy the other 50% share of the commercial property by selling the residential plot and save the long term capital gain on this plot sale. Otherwise can she buy another residential property on selling this plot when I am already holding a residential house. Please advice.

  315. Bhavnoor says

    1. you can consider 7 lacs, you would need bills from vendors.
    2. you will show under head capital gains
    3. no , you have to invest in residential one.

  316. Bhavnoor says

    since you will invest all money to purchase house before 31 july 2012 and get it registered in your name, you will save LTCG.

    the other two flats will not have any bearing then … also, registratin date is imp

  317. Bhavnoor says

    yes gift in family realtions doesnt attract tax .. but that does not mean you can avoid tax by gifting money from LTCG.

    moeny from LTCG can be tax exempt when you invest somewhere

  318. Bhavnoor says

    it applies to all properties excpt stock ..

    date of registration would be actual date

  319. says

    Hi,

    I would like to have information realted to long term capital gains for my property and about reinvesting the same.

    PURCHASE PRICE OF HOUSE = 9,10,000
    YEAR OF PURCHASE = 2006
    SALE PRICE = 45000 as per the sale agreement
    YEAR OF SALE = 2012
    NO OF YEARS = 6
    PURCHASE COST INFLATION INDEX = June 2006 = 497
    SALE COST INFLATION INDEX = May 2012 = 711
    INDEXED PURCHASE PRICE = PURCHASE PRICE X SALE CII/PURCHASE CII = 1,301,831

    CAPITAL GAIN = SALE PRICE – INDEXED PURCHASE PRICE = 3,198,169
    TAX WITH INDEXATION = CAPITAL GAIN X 20% = 658,823
    I hope all my calculations are correct and request you to pls answer some of my questions which will be a help !!!

    1. In how much maximum time i can re invest in residential property ?
    2. What minimum non taxable amount i can invest in the same residential property ?
    3. For how much time i can hold the next property so i don’t come in LTCG tax paying bracket ?
    If i buy a gpa based property in NCR or in delhi and pay all this money in black, then what is my liability for taxation as all the payment goes in cash ?

    Pls reply asap

    Regards
    Vikas Sagar
    9818373636

  320. Ravi says

    Hi,

    I bought a flat for 54lacs in Jan-12 and the following month I sold a property for 18lacs.
    Do I still need to pay the capital gain tax?

  321. Haider says

    Hi Bhavnoor,
    I had an apartment in Pune which I bought for approx Rs.21,00,000 and got possession in Nov’07. I made expenses on the furniture, modifications and maintenance which was close to 7,00,000; however, I do not have all the substantial proof since it was done through local carpenters. With all my expenses total value of apartment becomes 28,00,000. I sold it in Feb’12 for 46,00,000 and the same value was mentioned in all legal documents.

    Please help me with the following questions:
    1. Can I consider the expenses of Rs. 7,00,000 along with the apartment value of Rs. 21,00,000 to calculate LTCG? If yes, what all proofs do I need to have to prove the expenses of Rs. 7,00,000?
    2. How to show it into my IT Returns for 2011-2012?
    3. Can I invest my funds in non-residential property?

    Look forward to hear from you and will appreciate your advice.

  322. ANUJ says

    HI BHAVNOOR, I HAVE EARNED LTCG BY SELLING A PLOT OF LAND IN MAR 12 THAT I BOUGHT IN FEB 2008 AND PLANNING TO PURCHASE A RESIDENTIAL HOUSE BEFORE 31 JUL 12 BY INVESTING ENTIRE CONSIDERATION I RECEIVED.

    I HAD ALSO APPLIED FOR TWO FLATS, ONE IN NOV 09 AND OTHER IN DEC 11 AND THE POSSESION OF THESE WILL BE AFTER JUNE 14 OR LATER. WHAT COULD BE BEARING OF OWNERSHIP OF THESE TWO FLATS ON LTCG I SAVE NOW. KINDLY ADVISE.

  323. neetu says

    Dear bhavnoor

    my dad has sold his plot for 64 lakhs. To avoid longterm capital gain,he shall be investing to buy new property. My question however is if he gifts lets say 10lacs to me,what shall be tax liability for both of us. is it true there’s no tax on gifted money!

  324. abhay says

    An excellent article. want one clarification. you have mentioned that when a property is sold within one year, it is subject to STCG and when sold after one year, it is subject to LTCG. Does this apply to immovable properties as well?
    2) In case of a property allotted under open lottery by state Urban Development Authority, which one would be the correct cut off date for calculation of this holding period:
    -Date of original Allotment- March 1998,
    -Date possession was offered by the Govt Authority- June 2001,
    - Date of application to the authority for taking possession after paying >90% of the price- September 2008,
    - Date of Possession certificate-October 2010,
    - Date of conveyance/registration-May 2012

  325. Bhavnoor says

    Hi

    LTCG shall be available to person who paid for buying the property. you can gift money to your dad and it will still be tax free.

    NRIs are also required to file income tax returns in India, in case the local income exceeds the basic exemption limits. In case the income consists only of returns from investments or longterm capital gains and the applicable tax has been withheld on the income, the NRI is not required to file income tax returns.

  326. Akshay says

    Hi

    We bought property in 1995 when I was NRI and thru HDFC loan. The property has first name of my father and me being second holder. Now we want to sell the referred property. I am still NRI whereas my father is retired and do not file any tax returns. How do we deal with the ltcg now

    1. Can the ltcg be distributed between two of us equally
    2. My father who do not file tax returns can use funds for his expenses without any tax liabilities
    3. Myself being NRI do not file any tax return in india

    Thus can you please explain how can we treat the ltcg

  327. siva says

    Thanks Bhavnoor.
    She has not funded the proceedings by direct cheque but there are expenses related to repair/remodifications etc that was done when we purchased the flat was funded by her. But they were done by unorganized vendors so they didn’t accept cheque etc. Is there a way to show that in calculation ( we know the approximate amount) and do one of the following

    a) Splitting portion of Capital Gain on her name in accordance with the amount she spent
    OR
    b) Accounting the amont spent twoards repair/remodification towards cost of acquisition and reduce the LTCG.

  328. Bhavnoor says

    Hi

    since your queires are much in detail and might leap in confusion … request you to read section 54 of income tax act … its simple and all your queries will be answered …

    i can then help you if you have any further doubt

  329. Bhavnoor says

    Hi

    you can compute tax liablity on the same lines as given in article above. and you can save LTCG by investing the gains in other house property

  330. Bhavnoor says

    you can calculate LTCG based on example given in article and no exemption is available on ground of using the money for education.

  331. Bhavnoor says

    if you invested 20 lacs (from sale) in buying this new house … then no LTCG, else yes

  332. Bhavnoor says

    a) yes you can get
    b) date you own the house
    c) no time range specified for this particular thing

  333. siva says

    Hi Bhavnoor,
    thanks for the article. I have sold my flat and incurred LTCG. I am planning to invest it on 54EC capital bond. The flat which got sold was on joint name i.e. myself and my wife. While she was not funding the proceedings every document (including bank loan) had both our names together with mine as the first name. In this case can the LTCG be splitted across two people to minimize the tax burden on the returns?

    Thanks
    Siva

  334. Ramesh says

    Greetings of the day,
    I have submitted a Question regarding cost of Aquisition in ( Contact us of your website,) for a resi.House purchased in 4 phases in different years Viz: 1995, 1997, 2001 and Final cost in 2006 and registered in 2012 from housing Board of A.P.
    Hopin an early reply to my above mentioned E-mail Address.

    Thanks.

  335. brijesh says

    hii Bhavnoor ,
    Did ur term “ownership” means registring the new flat before 3 years or to have possession of the flat before 3 years after selling the earlier flat . Pls clarify.

    thanks in advance

  336. Punit says

    Hello.

    I sold a residential land on the 1st of April 2011 which was bought way back in 91-92.
    I built a wall surrounding the land along with one room.
    My queries are -
    * How much time do I get, to purchase another property? Pls be specific..
    * Does it has to be a residential property or I can buy agricultural or commercial land / building?
    * since July 11, the money is in a Fixed deposit for 1 year in a private bank. Is it ok? If not, what can be done?
    * what happens if I sell the newly purchased property within 3 years? What kind of penalty and tax do I have to pay then?

    Waiting for your prompt response…

  337. Mrs.S.V.Deshmukh says

    Shri Bhavnoorji,
    My mother purchased a plot of land in the month of July’1963 for Rs.5040.00 and a house was constructed thereon.The said constructed house and remaining plot of land was gifted to my sister and me jointly, in 2:1 proportion in the month of May’2003.A govt duty of Rs.48500/-for market value Rs.2425000/-& registration fee of Rs.24410.00 was paid.The said house is valued as Rs.693000/- as on 01/01/1981(Index-100) by a govt.approved valuer.The said house has been sold for Rs.5700000/- in the month of Nov’2011(Index 785).I was 63 as on the selling date. Will you please let me know (1) LTCG (2) Tax Liability in FY11-12 (AY12-13) (3) How can I save the entire tax ?
    Thanks a lot in anticipation.

  338. Umesh says

    Hi Amit

    Solution to the Long Term Capital Gain Tax, or to say of any taxation problem is not as simple as one think. There are many ifs and buts…

    First tell the date of purchase and purchase cost of the house so as to calculate LTCG after indexation.

    Secondly you sold the house in Oct 11 and now it is May 12 (time elapsed 7-8 months). Where you kept the sale proceeds during this period and in which account.

  339. AMIT KUMAR says

    Thank you for such en lighting article.

    But I do have a doubt, request you to help me . I have sold a house in October 2011 for 20 lakhs, and I am buying a house again in July 2012 for 40 lakhs. Do I come under the Long Term Capital gains tax.

    Thanks in Advance

  340. Prabhu Dayal says

    Dear Bhavnoor,
    Thanks for your response.
    But my question still remains not replied.
    How to calculate LTCG Tax if the property was purchesed much before base year of 80-81?

  341. Amit says

    Hi,

    I have recently booked an under-construction flat in a residential project in Bangalore (the agreements with builder to sell and construct have been made in March 2012; builder has given me the allotment letter; and it is expected to get completed in 3 years).

    I also own a flat in Hyderabad (taken possession in october-2008). I am planning to sell this Hyderabad-flat, and planning to use this money for paying installments of under-construction flat in Bangalore.

    Can you please let me know:-

    a) Can I get exemption of LTCG tax in this case (if the new under-construction flat is booked before selling the old residential flat)?

    b) For the purpose of LTCG tax exemption, what will be considered as the date of purchase of new under-construction flat? (Will it be the date of agreements to sell & construct OR will it be the date of allotment letter of under-construction flat OR will it be date on which Sale deed will be registered after three years)

    c) What is the time range during which I can sell-off my hyderabad flat (to get the LTCG tax exemption)

    Regards,
    Amit

  342. Saumya says

    Sir

    Can one purchase 2 or more residential flats out of LTCG, to save LTCG tax?
    Thanks

  343. Bhavnoor says

    for tax calculation, you can refer to the example in the article and replicate the same. shares purchased and now worthless would constitute Long term capital loss and can be used only when you sale them.

  344. Prabhu Dayal says

    How Long Term Capital Gain Tax ca nbe calculated if the property/plot was purchesed in 1977. On thsi plot house for resedentail purposes was made in 1978. And it was sold in end 2011.
    I purchesed some shares from the open market which are at present worthless and not being traded or cannot be sold. Can the incurred loss be included in the Return although those shares remain on my name. I intend ot minimise my tax liability under LTCG.

    Regards

  345. Bhavnoor says

    request you to follow up the example given in article for computing tac and u need to get ownership within 3 years

  346. Bhavnoor says

    no … u need to own(purchase) the other flat within 2 years or construct within 3 years .. to claim LTCG expemtion

  347. Bhavnoor says

    STCG on sale of property is added on to your total income and thus taxable at rate whichever bracket you shall fall in ..

    interest on home loan can be claimed as deduction under 80C for each year while filing return.

  348. vinay says

    Sir,
    Flat purchased on 24 Jan 2000 for Rs 10,00,ooo and Expenditure Rs 50,000.
    Sold on 05 April 2012 for Rs 20,00,000.
    Request tax applicable.
    If I invest in a new flat under construction, and the possession by builder is given after 4 years, do I get tax benefit. Thanks.

  349. Brian says

    Hi Bhavnoor
    I am an NRI. I purchased a flat in Bangalore in 2003 paying the 15% down payment and the balance in EMI for 5 years @ 8.25%. All the payment was done thru my NRE account. I am planning to sell the same this year and use the funds to pay for my sons education. I purchased the flat @ 8,00,000 and have got a buyer for 23,00,000.
    PLease advise
    1) If I have to pay LTCG how much would it be and
    2) Can I use the full amount on my sons education seeking exemption for this reason
    3) Can I get NRE payment for the same as well
    Txs

  350. Saurabh says

    Can LTCG be saved by combination of 2 methods?

    Example: CG=75lakh.

    New House: 50Lakhs.

    Bonds: 25 Lakhs.

    Or we have to pay LTCG on balance 25Lakhs?

  351. Sameer says

    Hi Bhavnoor,

    I have purchased a plot, and registered in January 2010. I have now booked a residential flat, and need to liquidate the site to make the future payments. I wish to sell the site in Feb 2013 to avoid short term capitals gains, and make the payment to the flat builder.

    The expected registration date of the new flat is Jun 2016. This is beyond the 3 years from the sale date of the residential plot. Can I still claim exemption of LTGC on the grounds that the payment was made to the builder within 3 years from the sale date of the site.

  352. Sunil says

    Dear Bhavnoor,
    I purchased a property in June 2009 and have sold it Jan 2012. Since i sold it before 3 years, the profit will come under short term gains. How much wil I be taxed. Also, I had a loan for the same period. Can I show the interest I paid for two and half years while claiming tax exemption. Also what else can I show to lower my tax gains
    thanks
    Sunil

  353. Bhavnoor says

    CII is not yet published for 2012-2013 .

    in case of capital loss … no tax needs to be calculated

  354. Bhavnoor says

    Date of registration i.e the date on which transfer is recorded in govt records

  355. Piyush says

    hi Bhavnoor,

    Can i get to know the CII for FY 2012-13. I am planning to sell my property which i purchased in Jan 2008 ( 2007-08). CII that year was 552.

    Please calrify one more thing which is shown as example:

    Purchase price in 2008-09 = 1000000.00
    Sell Price in 2012-13 = 1300000
    Indexation Calculation = 1000000(785/552) = 1422101.
    That means it is -(142201). what will be the LTCG Tax?

  356. Ravikiran says

    I have a residential apartment property with following details:
    allotment letter is dated in March 2007. The registration was done in Feb 2011. The procession was taken in march 2012.

    I wish to sell of the property. Kindly state do I have to pay short term capital gain tax. Also which date ( alottment date or sale deed date or pocession date) is considered for calculating 36months to consider long term capital gain tax.

  357. Bhavnoor says

    Hi Kavita

    The houses you currently own are of no relevance in calculation of capital gain or investment of capital gain in buying new house.

    If the old property that you are selling is in your name, the the gain amount (Sale price – indexed purchase price) can be invested in 3rd property you are buying to save on taxes.

  358. kavita says

    hi Bhavnoor,
    this is a good article but I need a clarification. if I am owning 2 houses jointly with someone (in 1 I am first owner and in the other 2nd owner) can I invest the sales earning of an old property into a 3rd property again in joint names where I am the first owner.
    appreciate your response and explanation to my query.
    thanks!

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