house property sold

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dharmin (Querist)
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09 February 2011 date of allotment letter July 1985
date of possession Jan 1986
Total cost Rs.73,965/- paid in July 1985

Sold in May 2010 Rs 40 lakhs.

New house purchases with all expenses RS35,00,000-/

can any 1 help me out for the advance tax liabilities n it's working

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)
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09 February 2011 Profit on sale of house property is long term gain. Calculate tax liability as follows:

a) calculate indexed cost of purchase by applying cost inflation index.

b) LTCG = sales value less indexed cost

c) if the cost of new house is equal to or morethan the gain whole of the amount will be exempted u/s 54 of the IT Act

d) on the other hand, pay tax @ 20% plus cess on difference between the amount of capital gain and cost of new house.

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