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Capital gains

Sanjay (Service) (81 Points)

31 May 2014

July 2000 - (Status: Resident India)

I purchased an Apartment in July 2000 for Rs. 4.65 lacs + Registration Cost of Rs. 32,000/- (approx.)

The apartment was purchased on Bank loan, repaid in 4 years.

Money was also spent on interiors / wood work of Apartment, however no receipts are available for that.

July 2014 - (Status: NRI)

I have finalised sale for Rs. 60 lacs and paper work will be done in July 2014. The circle rate is approx. 23.0 lacs.

In addition to above apartment I have few other residential properties as well.

From the information provided above, request to,

1. Provide me calculation for Capital Gains with applicable deductions, if any.

2. Is there any way to save Capital gains.

3. Is TDS @ 1% applicable that buyer may deduct from Rs. 60 lacs.

4. Any other information that I should take care about.

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8 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 31 May 2014

Government has not yet issued notification for CII for 2014-15. However, for rough calculation, I have used the CII for 2013-14 to get a general idea.

Sale consideration = Rs. 60,00,000/-

Less

Indexed cost of acquisition = Rs. 11,49,465/- (497000 x (939/406))

Long term capital gain = Rs. 48,50,535/-

You are required to invest Rs. 48 lacs in another property or in bonds.

TDS deduction u/s 195 shall apply here

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Sanjay (Service) (81 Points)
Replied 31 May 2014

Originally posted by : Mihir
	Government has not yet issued notification for CII for 2014-15. However, for rough calculation, I have used the CII for 2013-14 to get a general idea. Sale consideration = Rs. 60,00,000/- Less Indexed cost of acquisition = Rs. 11,49,465/- (497000 x (939/406)) Long term capital gain = Rs. 48,50,535/- You are required to invest Rs. 48 lacs in another property or in bonds. TDS deduction u/s 195 shall apply here

Thanks for the response.

Please clarify if any rebate on account of Bank Loan Interest, Renovation carried in apartment, annual maintenance, property tax etc can be availed and how it is considered in the above calculation.

Mihir (Wealth Manager) (5293 Points)
Replied 31 May 2014

You cannot claim bank interest twice. You have already claimed bank interest in your ITR. You may claim deduction for renovation provided it is a major renovation and you have all the bills supporting the expenses. You cannot claim maintenance charges, property tax etc as deduction.

Nikhil Kaushik (Fellow CA) (85743 Points)
Replied 31 May 2014

have to disagree with Mihir on the interest part. you can very much claim deduction for interest paid under capital gains too. there is no restriction on the same despite it being a double deduction.

Sanjay (Service) (81 Points)
Replied 03 June 2014

Request one clarification on above,

In order to save Capital gains tax, can I reinvest the sale amount in purchase of another flat and avoid TDS completely.

I already have multiple residential apartments.

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Nikhil Kaushik (Fellow CA) (85743 Points)
Replied 03 June 2014

irrespective of what you do with the money received, TDS will still be deducted.

Sanjay (Service) (81 Points)
Replied 03 June 2014

Originally posted by : Nikhil Kaushik
	irrespective of what you do with the money received, TDS will still be deducted.

Thanks Nikhil.

TDS will be deducted initially by buyer. That is fine.

Can i claim it back after proving that it has been reinvested in residential apartment. Will i be eligible for that since i already have multiple residential apartments.