Rajan Gumnani (Service) (114 Points)
20 November 2011Back Ground:
2 properties have been purchases both under construction and with similar delivery schedule. 1 of the property will be sold off on possession.
Question:
2. In either of the cases, how can we save tax on Capital gain? Both the Short and Long term.
praveen
(Chartered Accountant)
(6971 Points)
Replied 20 November 2011
1. Capital Gains depend upon holding period. Since you are saying that it is a property it will be STCG if held for less than 36 months and LTCG otherwise.
(But you must also state whether you are doing business in the form of real estate. If yes then it will be business income and not capital gains.)
2. You case save taxes by obtaining bonds of REC or NHAI.
Rajan Gumnani
(Service)
(114 Points)
Replied 20 November 2011
Thanks for the Information...Some clarification...
1. I believe it is STCG since the property will be sold off immediately on possession...36 month clause will apply only from date of possession, I presume. Am I right?
2. The Bond thing...Does it apply to both the STCG and LTCG? And what should be invested the whole amount (Principal and Capital Gains) or Only (Capital gains)?
3. Interest, which will be paid for Housing loan does that get reduce from the Capital gains, I set off the losses against my house property?
4. Alternatively, can I use the Capital gains to repay the Housing loan for the second property, Which I plan to keep there will be a HGS loan, which I plan to repay thru the Capital gains of 1st Property. Will that help in saving CG tax?
Z
( )
(2965 Points)
Replied 20 November 2011
For the purpose of detemining the period of holding , the date of acquisition and the preceding date of transfer is considered. Therefore STCG
However if FLAT is purchased from co-operative housing society then the date of allotment of shares shall be considered for determining the peiod
Plus consider Mr. Praveens point also for PGBP if appplicable
For saving tax
IF YOU HOLD IT FOR ATLEAST 36 MONTHS THEN YOU WILL BE ELIGIBLE FOR OTHER EXEMPTIONS ALSO LIKE
sec 54 In case of residential house property
Applicable only to HUF/ individual
RESIDENTIAL HOUSE PROPERY IS TRANSFERRED (if you declare the asset as house proprty)
sec 54 F (other than residential property)
sec 54 EC (LTCG Only)
As mentioned by Mr. Praveen NHAI or RECL (REDEEMABLE AFTER 3 YEARS)
Max amount 50 lakhs rupees
invest within 6 months from date of transfer
You should hold the property
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