Capital Gain

HI This will generate the Long Term capital Gain Calculation will be Sale Consideration : 900000 Less: Indexed Cost 190000*519/182 = (541813) Indexed Cost of Improvement 25000*519/259 = ( 50097) Long Term Capital Gain = 308090 Tax @ 20% = 61618 Add: Surcharge , if any Add: Cess @ 2% = 1232 Total 62850 Can save the tax under section 54 , 54EC Take Care Ashu

Thanks for the Computation you send to me.

rs. 25,000 should be considered as cost by using index. pushpa's calculation is correct. exemptions are vailable by making investment which can be used if tax is to be saved.

any one can tell me hw to calculate income from sale of shares,bonus shares & dividend ie pur value of share is 10000 in 2005-06 bonus 1:1 share dividend is 150% for face value 10 of 100shares.and sales price 10450 in 2006-07

Section 80C imposes time restriction on sale of residential house, the minimum period of holding should be 5 years. If sold earlier, then tax exemption enjoyed shall be withdrawn and the quantum of deduction already taken in the preceding years would be deemed as income of the taxpayer in the year of sale. Again the question of STCG & LTCG arise. Here also tax is imposed as per the provisions of the Act. What I want to know is the total Tax implication if the property is sold before the expiry of 5 years. Whether both 80-C scenario & Capital gain tax will figure in the computation ?

Before giving any suggestion to your client, get all the particulars from them. Clients do not furnish full details.They assume so many things.So get every thing in writing. Date of purchase of land date of purchase of already constructed house: dates of extensions made: These will provide enough data to work out the index value of the property sold at various stages. Obtain copy of the sale deed to find out the market value fixed by the registration authorities to work out the correct capital gains in the light of most ignored provision 50C. Some of our clients claim a building as residential house,yet they use it business purpose any claim it as a business asset by claiming depreciation,repairs and municipal taxes as business expenditure. Then the asset becomes a depreciable asset, and the capital gains are to be worked out differently and all such capital gains shall be treated as short term capital gains.Be patient, and read the subject by yourself, then ask questions. Do not follow without understanding the intricate problems involved. This is being suggested to you to strengthen your professional career.

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