Income tax and sale of house property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 November 2010 Hello,
I am planning to sell my flat in jan 2011 which was bought in Pune in Dec 2007 , Its a second hand purchase of 10 year old flat, the cost of the flat payment paid and registered is 17 lacs. Now I am planning to purchase a new flat at the cost of 25 lacs, what would be income tax implications and what i need to do to save tax ?

Thanks,

Aditya Maheshwari

Aditya Maheshwari (Expert)
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09 November 2010 If the old flat is sold for around Rs. 45 lakhs there would not be any capital gains liable for tax.

Sale consideration = 45 lakhs
Indexed cost = 22 lakhs (approx)
1700000*711/551
Gain = 23 lakhs
exemption u/s 54 = 25 lakhs
net Capital gains = NIL

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Querist : Anonymous

Querist : Anonymous (Querist)

09 November 2010 Thanks a lot for the reply ! The old flat will be sold at around 23-24 lacs and i have a housing loan for it around 11 lacs now on going, which I will repay fully from the sale of the old flat.
The new flat is being purchased at around 25 lacs, i am planning to take a housing loan for the new one for 12-14 lacs and
the difference of amount 12 -13 lacs from my old flat will be invested in new flat.

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Aditya Maheshwari

Aditya Maheshwari (Expert)
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09 November 2010 Even then the gain from sale of property will be exempt u/s 54.

Your case is similar to one out here
http://itatonline.org/archives/index.php/cit-vs-dr-p-s-pasricha-bombay-high-court