Hello Sir, I purchased a house on December 16, 2016, for 15 Lakhs. For this, I have taken a loan of 21 lakhs (15Lakhs for house + 6 Lakhs for additional construction works ) and sold it on May 05, 2018 for 32 Lakhs. I paid back 20.5 Lakh from the amount I received towards closing the previous home loan. I am left with a cash of 11.5 Lakh in my account. I would like to buy a new apartment now to avoid capital gain tax. Kindly guide me with below queries: 1. What is my Capital Gain? Is it 17 Lakhs or 11.5 Lakh or something else? 2. Do I need to transfer all 11.5 lakh I have in my account to the new apartment builder to show it was from the previous sale or can I utilize 3-4 lakhs from this as down payment and take a new home loan equal or higher to capital gain for buying the new property? 3. What should be the minimum price of the apartment that I should buy to avoid capital gain tax?
Hi,
1. Your short term capital gain amount is 17 lacs.
2. You can save capital gain tax by investing in new house because that option is available only when you sale a house after holding it for more than 2 years.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
1) It is a short term capital gain as you sold out the property within 2 years of the acquisition therefore capital gain would be (32-15) i.e.17 lacs.
2) In case of short term capital gain there is no exemption available therefore you need to pay tax on 17 lacs @30%. It is upto you how to utilise the money as there is no exemption available.
Hi,
Since you have sold the flat within 2 years, you will be liable to pay tax on short term capital gains. There is no exemption available for STCG tax.
Regards,
Nikhil
.
Hello,
This is a short term capital gain transaction, so in no way can you save taxes. You will have to pay tax as per slab rate on your Capital Gain. Which based on the information provided by you is Rs.17 Lacs.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
