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Required tax calculation on sale of flat

Ankit (CA Finalist) (188 Points)

02 October 2012

if i have bought a flat of rs. 2.76 lacs in 1996 and now the market pice is about 20 lacs and as per municipal value it is of 15 lacs and now sold at 20 lacs on 25th sept

Please suggest the tax treatment ??

Thanks

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4 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 02 October 2012

852/305*2.76=7.7099

20-7.7099 = 12.2111 is your LTCG

invest in new residencial property or pay tax @ 20% as you feel good.

pay tax on (20-2.76)=17.24 @ 10%

no benefits can be availed under chapter VIA under this gain.

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Raghavendra B. kuber (Accounts Executive) (88 Points)
Replied 02 October 2012

Dear Sir, What is 852/305 will u plz explain me

Dintakurthi Tirumala (CA FINAL) (15994 Points)
Replied 02 October 2012

Sir, Raghavendra Kuber 852/305 means cost inflation index of Property sold year(852)/Property Purchased year(305).

I required One more confirmation from U.S.Sharma Sir, I think Those who opted option according to the section 112 are only required to pay long term capital gain tax @ 10% with out getting the benefit of indexation cost.

According to the section 112:- "Where the transfered long term capital asset is in the nature of listed securities or units of UTI or mutual fund or zero coupon bonds,the gain arising from the transfer of such securities or units shall be liable to tax at the rate of 10% on such long term capital gain computed without the benefit of indexation or at the rate of 20% on such long term capital gain computed availing the benefit of indexation,Whichever is more beneficial to the assessee. For this purpose listed securities include the following securities listed in any recognised stock exchange in India:

a) Share, Scrips,Stocks,bonds,Debentures,Debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate;

b) Government securities;

c) Such other instruments as may be declared by the central Government to be securities; and

d) Right or interest in securities."

Based on the above provision the above case not avail the benefit of 10% tax with out indexation cost benefit. So should be liable to pay 20% tax after considering the indexation cost and no other second choice to the assessee or invest according to the section 54 to get the exemption of capital gain tax.

So i requesting you please confirm and clarifing your answer because as per my knowledge i don't know about such exemption i.e benefit of 10% tax so please give clarification if such exemption available to such case because i required it form my exams and future and i have to update my knowledge.

Thanking you sir,

OM SAI SRI SAI JAI JAI SAI