capital gains

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 August 2010 I have 2 questions regarding capital gains.

1. where existing flat is sold for 10 lac and new flat purchased for 8 lacs.

2. If the 2 lacs is used for building another a house, is it taxable.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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23 August 2010 What is the cost of the old flat sold?

Exemption available for one house property u/s 54 if gains on sale of residential flat invested in buying new residential property.

Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2010 Sir,

I have 2 questions.

1. if an old flat is sold for 20 lacs, and a new flat is purchased for 15 lacs, what happens to the balance 5 lacs.

2. if this 5 lacs is used for renovation/construction of another house, what will be the taxable capital gains

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CA SMR

CA SMR (Expert)
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24 August 2010 If the CG arising on selling the old flat exceeds the value of the new flat then the net amount becomes taxable.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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24 August 2010 If your indexed cost of acquisition is 5 lakhs and then flat is sold for 20 lakhs then LTCG is Rs. 15 lakhs and which is invested on purchase of house property then exemption from LTCG u/s 54 Rs. 15 lakhs and hence net capital gain zero.

2. No exemption from capital gains if gains not invested to purchase new house property.