TAX ON INCOME BY SELLING A RESIDENTIAL PLOT

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 February 2011 WHAT WILL BE TAX LIABILITIES ON THE INCOME BY SELLING THE RES. PLOT PURCHASED 20 YEAR BACK.
HOW ONE CAN SAVE TAX BY INVESTING THE SELLING AMOUNT.kINDLY TELL WAYS OF INVESTMENT.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

08 February 2011 You have to calculate long term Capital Gain
of the plot -

LTCG= Sales Consideration-Indexed Cost of Acquisiton- Expenditure directly related with sale like brokerage etc.

For getting indexed cost you have to multifly the cost by 711 and divide by the Cost inflation Index of the Financial year
of purchase.

If you are having not more than 1 residential house, you may invest the Sale Proceeds in acquiring a new residential house to save tax.
Otherwise you may purchase Capital Gains bonds of the amount of Capital Gains for saving the tax.

Querist : Anonymous

Querist : Anonymous (Querist)

09 February 2011 Thanks a lot.

Upgrade to CAclubindia Pro. Subscribe Now!

Querist : Anonymous

Querist : Anonymous (Querist)

09 February 2011 Please clarify, Can residental house be purchased ( to save the tax) from the earning after selling a residential land plot.Or we have to purchase only residential land in place of land only.

Guest

Guest (Expert)

09 February 2011 You can purchase residential house but investment in residential purpose id meaning less for saving the tax on longterm capitalgain.