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Capital gain

Dharmendra Jain (Mcom, LLB) (142 Points)

02 July 2010

I sold my residential House in May 2009 at Rs. 20.00 Lacs by cheque .I had only house at that time and till date I have not purchased any house. The house was constructed in 2001. The plot was purchased in 1990. at cost Rs. 60,000/- The construction cost was appx. 10.00 Lacs. What is best procedure to compute minimum income tax to be paid. And let me advise the techniques also to save Income Tax.

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5 Replies

Jimil Shah (none) (57 Points)
Replied 03 July 2010

Sale consideration = 20,00,000

less : indexed cost of plot = ( 2,08,351)

less : indexed cost of Construction = (14,83,568)

TAXABLE LONG TERM CAPITAL GAIN = 3,08,081

IF U WANT TO SAVE TAX , INVEST MONEY IN CONSTRUCTION OR PURCHASE OF RESIDENTIAL PROPERTY WITHIN 3 YEARS FROM DATE OF SALE.

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DT Fundas - Tarun rustagi ( Author) (1150 Points)
Replied 03 July 2010

dear dharmendra

deposit the amount of capital gain before 31st july in capital gain scheme otherwise u can not claim exemption if u want to construct or purchase a new house after the month of july.this is the only option for u to reduce tax to minmum or exempt.

regards

tarun rustagi

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DT Fundas - Tarun rustagi ( Author) (1150 Points)
Replied 03 July 2010

capital gain account scheme is maintained by schedule banks.

regards

tarun rustagi

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harish .k (STUDING) (306 Points)
Replied 03 July 2010

Mr .tarun rustagi is right that' s the only option u have to exempt from LTCG otherwise it is taxable in current yr

Reena Verma (CA Finalist) (417 Points)
Replied 05 July 2010

Sale consideration 20,00,000

less : indexed cost of plot ( 2,08,352)

less : indexed cost of Construction (14,83,568)

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LTCG 308080

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TO CLAIM THE EXEMPTION, YOU MUST PURCHASE A RESIDENTIAL HOUSE WITHIN TWO YEARS OR CONSTUCT A NEW HOUSE WITHIN 3 YEARS FROM THE DATE OF SALE WITH THE LOCK IN PERIOD OF 3 YEARS.