14 February 2016
R/all,
I have a query regarding long term capital gain.
My father purchase a residential plot in f.y. 1991-92 for Rs. 38000. In f.y. there was an expense of rs 30000 for improvement.
Now we are selling the property and consideration will be approx 20,35,000 and expenses for brokerage and traveling etc will be about 50,000.00 registry is due in april 2016
How much ltcg will be payable and how can we save tax.
Please suggest
14 February 2016
You have to apply indexation cost 1991-92. Purchase cost * indexation 2016-17/indexation on 91-92 i.e Rs.38000*1081(2015-16) If registered within 31st March 15/199, Same way to calculate cost of improvement not mentioned year, than selling Exps, all you have to add deduct with sale consideration. Difference will be Capital Gain.
It can be reinvested to purchase of house, but from this year exemption available only one house. If your father already own property than you will not get exemption on second property.
One more option investment in capital gains Bond, lock in period 3 years, Maximum amount can be invested 50 lakhs. Interest on capital bond is taxable .
14 February 2016
Thanks for you suggestions. This property has been given to me as my part in father's property, though it is still in the name of my father. Now is there any way available for me to get the money transfered to my account or purchase a new property in my name, from the amount we will get from the sale of property.
CAclubindia
