I had bought a residential house of 11,51,000/- in 2009 and sold it for Rs. 30,50,000 in 2018. In the meanwhile I have also purchased a flat where I am residing right now in March, 2017. Now my question is if I invest the realized amount in some residential property again whether I will be eligible for the exemption in LTCGT if yes how it is possible /if not then how much tax I would have to submit to the IT dept.
Whether I have to invest full realized amount i.e. 3050000/- in the the property or the difference amount of (Rs. 3050000/- less 1151000/-) would be necessary for the twx exemption.
In My previous house which I have sold, I had incurred certain expenses to maintained it like Paint, repairing etc which is almost Rs 50000/- during my ownership but I have no proof of that but I have paid the property tax Rs. 18000/- I have the receipt of that but the date mentioned on it after 7 days of the date of registry.
Hi
Capital Gains shall be computed by reducing indexed cost of acquisition i.e. 1151000 after indexation from sale proceeds I.e. 3050000. You need not invest entire sale proceeds. Only the capital gains have to be invested.
When was the property sold? Please share date of purchase and sale of properties in 2017 and 2018. There is a possibility that investment in 2017 shall qualify as exemption for capital gain occurred in 2018.
Hi,
If you sold the house before March 2018 (I.e. within one year from the purchase of new house), then you don't need to buy anything. Your house purchase in 2017 will be considered as eligible investment.
Further, you were required to invest only capital gain amount.
You will have to claim exemption u/s 54 in your return of income.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
Those paint expenses and Property taxes are anyways irrelevant for calculation of capital gain tax.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
The new property I had bought was on 20.03.2017 & the Property was sold on 08/03/2018. So whether I will be qualified for the tax exemption or not.
If not qualified for the tax exemption then what will be the Capital Gain Tax amount?
It will qualify as exemption. Hope the property purchased at a value greater than the capital gains.
But, reporting of such capital gain and claim of exemption shall be mandatory.
Yes, it will be eligible for tax exemption.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
Hi,
To get the capital gains exemption, you would only need to utilise the capital gains and not the total amount of sale proceeds. You will also be eligible for indexation on the cost of the property, thereby reducing your capital gains liability.
Property tax, painting etc do not form part of the cost of the property and hence you cannot claim any benefit of the same.
To claim capital gains exemption, the property needs to be bought one year before the transfer of the old property or a new property can be bought within 2 years of the date of transfer.
Hope that clarifies. You can call for any further clarifications.
Regards,
Nikhil.
Yes, the property purchased in 2017 will make you eligible for capital gains tax exemption.
Regards?
Nikhil.
Dear Sir,
You can reinvest in other property and the exemption amount would be capital gain only.
Or
You can claim exemption of March 2017 property from the property sold in March 2018.
You can claim expenses of paint and repairing.
K