Long term capital gain query

Tax queries 609 views 3 replies

arumoy

proprietor

75 Points Joined July 2013

Hallo.

My client sold his residential house and received 15lakhs in FY 2011-12 and 39lakhs in 2012-13, full value of consideration comes to 54lakhs. Fair market value also comes to 54lakhs. therefore, long term capital gain is nil. he invested 21lakhs in buying a flat and constructing a house and rest he invested in shares.

my question is: is it right that the capital gain is nil in this case?? if yes, then what should be the tax treatment?? if no, then how should i proceed with this matter regarding tax payment, if any..??

awaiting reponse eagerly,

regards,

arumoy dutta,

haldia.

Replies (3)

CA Momin Owais Ahmed

Audit Manager

154 Points Joined December 2012

Capital Gain is not calculated by taking Market Price as cost, Cost of Purchase or Construction should be considered for calculation, If you provide me the amounts involve with all different date then we will proceed further

Mihir

Wealth Manager

5293 Points Joined December 2008

If the house property was purchased three years prior to sale, then it will be calculated as per long term capital gain. The diference between buying price and selling price along with the dates including miscellaneous expenses attributed to the sales, and factored into cost inflation index, you arrive at the capital gain. 20.36% is the rate of tax for long term capital gain.

Since you have already invested in purchasing another flat, it is likely that there will be no tax liability. However, without calculating the long term capital gain, one cannot estimate whether there is any tax liability or not.