Calculation of capital gain and its investment.

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Querist : Anonymous

Querist : Anonymous (Querist)

04 April 2014 A person has purchased a flat in the year 2004 and sold it out in the year 2013. In this transaction how to calculated capital gain and how to invest them to save income tax or capital gain.

Harsha goyal

Harsha goyal (Expert)
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04 April 2014 Sale Value = xxxxxxx
Less: Indexed Cost of acquisition = xxxxxxx
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capital Gain = xxxxxxx
Less: exemption u/s 54,54EC = xxxxxxx
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Net taxable capital gain = xxxxxxx
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here indexed cost of acquisition means
Acq cost * cost of indexation of year 2013 / cost of indexation of year 2004.

Note:
1. indexation will depend upon the year in which you have purchased as well as sold the flat. you have not mentioned the year properly. I mean whether it is 2003-2004 or 2004-2005.
2. Time to reinvest is different u/s 54 vis-a-vis 54EC. under 54 the time limit to reinvest is 2 yr in case of purchase or 3 years in case of construction from the date of transfer. If you have given the token money within 1year before the date of transfer then it will also be exempted. Claimed when amount is reinvested in another House property.
3. Time limit in case of 54EC is 6 months from date of transfer. Claimed under 54EC if amount is reinvested in bonds.
4. Amount of exemption is Amount reinvested or Capital gain whichever is less.
5. If the amount cannot be invested as above then you have the option to deposit the amount in the CGDS. before due date of filing return

Querist : Anonymous

Querist : Anonymous (Querist)

09 April 2014 Thanks please answer my query in the light od following information.
The said flat is purchased in the month of oct 2004 and agreement cost was Rs.8,20,000.00 and sold for Rs 21,00,000.00, out of which Rs.7,50,000.00 was paid for housing loan taken for the purpose of puchasing the property, in the month of april 2013. The property is in pimpri chinchwad area i.e. p.c.m.c. limit, near pune.

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Harsha goyal

Harsha goyal (Expert)
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13 April 2014 Sale Value = 2100000
Less: Indexed COA = 1604125
(820000*939/480) --------

Capital Gain = 495875.
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1. Thus capital gain is Rs. 495875. Here I am assuming that the loan was taken to purchase the flat of Rs. 820000 in the Yr 2004 and now that you have not purchased any other flat, so amt is not reinvested. and hence tax is payable @ 20% + cess.
2. You can claim the deduction of repayment of housing loan u/s 80C subject to Rs. 100000/-.

Harsha goyal

Harsha goyal (Expert)
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13 April 2014 or you can also deposit Rs. 495875 in capital gain deposit scheme, in which case there is will not any tax liability.
the amt to be deposited before the due date of filing the return