14 January 2012
Have a Nice day My client have four son and two residential house before 1981 cost A-42500.00 & B-275800 now sale "A" house Rs.45 lac and invest to residential hosue for son but purchse own name rs.3425800 in 2010 how can I save tax
15 January 2012
1. You have to get the value as on 1.4.1981, in respect of the House A. 2. Suppose, it is valued at Rs.100000/- as on 1.4.1981. 3. Indexed cost = Value as on 1.4.1981x 7.85 Or 785000. 4. The House Purchased by assessee should not be earlier then 1 year , from the date when House A is being transferred. for claiming exemption/ partial exemption.
5. Capital Gains =4500000-785000=3715000 6. Taxable Capital Gain = 3715000-3425800 7. Please note that 3425800/ must have been invested within 1 year before sale of House A. Otherwise the assessee will have to purchase another residential house.
Also, coming to your query to save tax, you need to invest the balance Rs. 2,89,200 in capital gains bonds like NHAI and REC. This will make the tax liability of your client as zero.
15 January 2012
Against comm. property you will not get exemption. Better, you purchase bonds as suggested by Prof. Bajaj. Please also confirm at your end that the time difference between the 2 transactions does not exceed 1 year.
CAclubindia
