23 October 2007
hi sir i have the query that my mother has sold a land on 25/may/07 Rs. 600000/ bought at a price of Rs. 130000/ and deposited Rs. 430000/ in capital a/c. now i want to know that is interest received on this amount is taxable and also in order to save tax i.e. LTCG in what properity should i invest.
23 October 2007
There are Capital Gains Bond issued by various investment companies viz ICICI,IDBI, LIC and even nationalised banks' bonds.
Unless your mother invests the proceeds of the sale in constructing another house or invests the proceeds in the specified bonds, she is liable for long term capital gains tax.
The interest portion on the deposit is taxable as Income from other sources and is eligible for deduction under section 80-L to the extent of Rs.12000 p.a. generally and additionally Rs.3000 p.a.for UTI mutual funds and Central and State Government securities.
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