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Tax treatment of sale of property

raghuraman (Senior Assistant) (78 Points)

11 November 2011

I hv purchased a plot before 20 yrs. back @ 10000/-. Now i want to sell the same @ 1500000/-. What is the tax treatment. How to avoid tax in this

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10 Replies

Devendra (Chartered Accountant) (4775 Points)
Replied 11 November 2011

Dear Raghu,

Reduce the Purchase price after taking the Indexation Benefit, from the Selling Price of the Plot. Your income shall be taxed under the Head Income from Capital Gains (Long Term Capital gains).

Regards,

Devendra K

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valji (Accounts manager-MBA) (2150 Points)
Replied 11 November 2011

agreee with above

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 11 November 2011

If the plot is purchaed before Apr81 then you will have to consider the FMV of teh cost of the asset as of Apr81 or the cost before Apr81 whichever higher & then accordingly apply indexation to the cost & take the indexation benefit.

abhishek jain kolkata (STUDENT) (216 Points)
Replied 11 November 2011

agreed with both above

Vaibhav Chauhan (Student - CA Final) (26 Points)
Replied 14 November 2011

invest the capital gain so computed by the methods stated above in purchasing a house property within 2 years of selling your property or construct a house property within 3 years. the amount unutilised till the filing of return u/s 139(1) should be deposited in the Capital Gains A/c Scheme of nationalized bank.

The house property so purchased or contructed cannot be sold of within 3 years of purchase or construction.

if the amount deposited in the scheme is not utilised within 3 years for the above purposes then it will be taxed in the year in which the period of 3 years expires.