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Long term capital gains tax on gifted property sales

V HAMSAPRIYA (Operations and Finance Manager) (52 Points)

22 July 2016

Dear Forum members, My father gifted me a land in Sep 2007 (I held Indian Passport, but NRI status) and now I plan to sell in August this year. Now I am British with Overseas Citizen of India status. I've taken a NRI home loan in June 2007. My query is how much I owe as capital gains tax if I pay the whole proceeds from the sale of gifted property into my existing home loan. Many thanks. Vijay

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 22 July 2016

As I understand, there is no exemption from capital gain for repayment of home loan out of proceeds of sale in this case. The only way to get exemption is by investing in other house property, bonds etc. subject to specified conditions. That means, if you had purchased this house property (for which loan is outstanding) within 1 yr before sale of plot (which is not the case), then there was a possibility to avail exemption u/s 54F.

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V HAMSAPRIYA (Operations and Finance Manager) (52 Points)
Replied 22 July 2016

Many thanks to Poornima Madhava for clarifying. Will proceed to file the returns. Regards.

V HAMSAPRIYA (Operations and Finance Manager) (52 Points)
Replied 22 July 2016

Hi again, I was reading another forum which says from 2013, there is no capital gains tax on rural agriculture land. Can anyone handled similar situation and share the information?

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 22 July 2016

Oh is this a rural agricultural land? If yes, it is exempt from tax since rural agricultural land is not a capital asset for the purpose of income tax.