Capital gain tax

This query is : Resolved

BHAVESH (Querist)
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12 January 2014 I am having a property out of Mumbai & am intending to sale it off. The details of purchase & Sale is as below:

Purchase Date: Oct 2000

Purchase Value: INR 7.00 lacs

Sale Value Approx 70 lacs

Sale Date: Aprrox on or before March 14

Nikhil Kaushik

Nikhil Kaushik (Expert)
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12 January 2014 approx capital gains of Rs 55.30 lacs...

BHAVESH

BHAVESH (Querist)
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12 January 2014 Is this figure with Indexation cost or without Indexation. This means that I will have to invest in the property to the extent of 55.30 lacs in order to save capital gains tax.

I am currently having a property in proper Mumbai and have availed Housing loan on the same property. Can I repay the loan against the sale proceeds received from another property or it is mandatory for me to invest in another property

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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12 January 2014 Since you are having 2 properties no benefit will be available to you except price indexation. So you calculate indexation and the only option with you is to invest 50,00,000/- in Bonds as specified u/s 54EC. If still your capital gain is greater then the index valuation you have to pay LTCG. The only thing you can reduce is brokerage if any paid by you. If he or she is your family member then of 70 lacs 1% can be paid as brokerage and that too you should pay by cheque.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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12 January 2014 Dear Bhavesh,

One question, the property you are selling right now, is it residential property or some other asset?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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12 January 2014 provided it is a property subject to taxation from income from house property, then you can also avail section 54. you need to invest Rs 53.31 lakhs to claim full exemption. Now regarding the question of whether the same can be used for repayment of housing loan, well it depends on when you bought the house against which loan is there. If the house was bought in less than a year before the sale of this property, then you can claim exemption. If it was bought more than a year ago, then no...then you shall have to invest in some other house property..