• LTCG from sale of property

House purchase details
Date: 18/05/2011
Purchase price: Rs 1302060/-

House sell details
Date: 14/02/2018
Sell price: Rs 2700000/-
Market Value: Rs 2819000/-

Is the tax will be calculated considering Sell price or market value?
How much is capital gains?
How much tax should I pay?
Asked 5 years ago in Capital Gains Tax

Hi

Sales consideration shall be 27 lacs provided the stamp duty before of the property is not more than 27 lacs.

Capital Gains are coming to around 7.75 lacs.

Taxes shall be around 1.6 lacs increased by interest applicable as you would not have deposited advance tax.

Lakshita Bhandari
CA, Mumbai
5687 Answers
909 Consultations

5.0 on 5.0

Hi,

Your capital gain will be around 7.75 lacs. You will have to pay tax@20.6% on 7.75 lacs.

You can save taxes by investing in NHAI/REC bonds within 6 months or investing in residential property

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

Yes, it will change the calculation.

New capital gain would be approx INR 8.94lacs.

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

I believe 28.19 lacs is not the market value but the stamp duty value I.e. the minimum rate prescribed by the department.

In that case, 28.19 lacs shall be considered as sales consideration.

Now, the capital gain taxes shall be around 1.84 lacs; capital gains being around 8.94 lacs.

Lakshita Bhandari
CA, Mumbai
5687 Answers
909 Consultations

5.0 on 5.0

The selling price will be considered as 28.19 lakhs and the capital gains tax would be approx 1.91 lakhs.

You can save the taxes either by reinvesting in a residential property or buying specified bonds.

Regards,

Nikhil

Nikhil Khanna
CA, Mumbai
1429 Answers
19 Consultations

4.8 on 5.0

Hello,

As per the details provided, the sale consideration for computing capital gains will be sale amount received or stamp duty value whichever is higher. But if the difference between the above two is not greater than 5% then sale amount received can be taken as sale consideration for computation. In this case, assuming market value to be stamp duty value, the difference is less than 5%, RS.27,00,000 is the sale consideration.

The long term capital gains is Rs. 7,75,216/-.

The tax payable on above gains is Rs. 1,59,695/-.

You can avoid payment of this tax if certain investments are made. Kindly revert to know the various modes of investments as early as possible as they are time bound.

Meera Anand
CA, Ambala
85 Answers

4.8 on 5.0

The Sales Consideration is to be taken at Actual Consideration or Stamp duty value whichever is higher. As you have paid stamp duty on Rs. 28,19,000/- it will be treated as sales consideration. You can claim indexed cost of acquisition of the purchase value and determine long term capital gain. Tax will be payable at 20% of the Capital Gain.

Indexed Cost of Acquisition will be = 1302060*272/184 = Rs. 19,24,785/-

LTCG will be = [deleted] = 8,94,215/- and tax @ 20% will be paid provided you have not claimed any exemption u/s 54

Lookman Mansuri
CA, Vadodara
20 Answers

5.0 on 5.0

Hi,

Hope you are doing well !

Your property market value is to be sales consideration for capital gain purpose i.e. Rs. 28,19,000/-

Please find below the capital gain working :

Amount in Rs.

Sale Consideration 28,19,000

Indexed cost 19,24,784

LTCG 8,94,216

LTCG Tax @ 20.6% 1,78,843.13

Thanks & Regards,

Payal Chhajed

Payal Chhajed
CA, Mumbai
5188 Answers
288 Consultations

5.0 on 5.0

YOUR SALE CONSIDERATION WILL BE RS 2819000 (THAT IS STAMP DUTY VALUE)

LESS : COST OF ACQUISITION

RS. 1302060 * 272/184 RS 1924784

------------------

CAPITAL GAIN 894216

TAX @ 20 % RS 178843

aDD EDUCATION CESS

ADD INTEREST

Bhadresh S Mevada
CA, Surat
49 Answers

Not rated

DEAR SIR,

AS PER section 50C SALES CONSIDERATION SHALL BE

A) ACTUAL SALES CONSIDERATION

OR

B) STAMP DUTY VALUE

WHICHEVER IS HIGHER.

IN YOUR CASE SINCE STAMP DUTY IS LEVIED ON MARKET VALUE i.e 2819000, SO SAME WILL BE CONSIDERD AS STAMP DUTY VALUE.

ACCORDINGLY SINCE STAMP DUTY VALUE(2819000) IS HIGHER THAN ACTUAL SALES CONSIDERATION(2700000) SO YOUR DEEMED SALES CONSIDERATION WILL BE 2819000.

HERE IS COMPUTATION FOR YOUR INCOME UNDER HEAD CAPITAL GAIN :-

NET SALES CONSIDERATION 2819000

(-) INDEXED COST OF ACQUISITION(1302060/184*272) 1924784

(-) INDEXED COST OF IMPROVEMENT NIL

INCOME U/H CAPITAL GAIN 894216

Shiv Kumar Agarwal
CA, Delhi
489 Answers
74 Consultations

5.0 on 5.0

Dear Sir,

As the stamp duty is paid on 28,19,000 it is assumed that 28,19,000 is the stamp duty value as per govt. valuation and that shall be used for computing capital gains tax.

Computation of capital gains :

Sale Consideration : 28,19,000

Indexed cost of acquisition : 19,24,784

Taxable LTCG : 8,94,216

Tax on LTCG @ 20% : 1,78,843

Cess @ 3% : 5,365

Total Tax due on LTCG : 1,84,208

Note : Indexed cost of acquisition is calculated as (13,02,060*272/184) - 19,24,784

272 is cost inflation index for F.Y.2017-18 and 184 is cost inflation index for F.Y.2011-12.

You can also claim deduction u/s 54 by investing (Rs.8,95,000) in new house property or in bonds as specified under section 54EC.

Hope all your queries are resolved.

Siddhant Shah
CA, Mumbai
120 Answers
1 Consultation

5.0 on 5.0

Dear Sir,

Since stamp duty while selling the property was paid on market value then market value will be considered as Stamp duty value.

As per section 50C, the sale consideration for computing capital gains will be sale amount received or stamp duty value whichever is higher.

The calculation for capital gain as below:

Sale Consideration : 28,19,000

Indexed cost of acquisition : 19,24,784 (Based on CII)

LTCG : 8,94,216

Tax on LTCG @ 20% : 1,78,843

Cess @ 3% : 5,365

Total Tax due on LTCG : 1,84,208

The formula to calculate the cost inflation index is as follows:

Cost Inflation Index (CII) = CII for the year the asset was transferred or sold i.e 2017-18 / CII for the year the asset was acquired or bought i.e. 2011-12.

You can save the taxes either by reinvesting in a residential property u/s 54 or buying specified bonds u/s 54EC.

Warm Regards,

Karishma Chhajer

Karishma Chhajer
CA, Jodhpur
2450 Answers
29 Consultations

5.0 on 5.0

Tax will be calculated on sale consideration or stamp duty value whichever is higher so here sales consideration will be 28.19 lacs,Total tax will be aprox 1.85 lacs.

Swati Agrawal
CA, Mumbai
1146 Answers
7 Consultations

5.0 on 5.0

Value adopted by Stamp Valuation authority will be considered as full value of consideration if the sales value is less than the value adopted by authority for the purpose of stamp duty.

Hence, Market Value will be considered as sales consideration for the purpose of calculating LTCG.

LTCG will be Rs. 8.94 lakhs and your tax payable on the LTCG will be Rs. 1.84 lakhs.

Thanks

Rupali Gupta
CA, Bikaner
16 Answers

Not rated

1) Normally sales consideration will be taken as higher of actual sale price or stamp duty value. so in your case it will be taken as Rs. 2819000/- however if you have evidence to prove it that stamp duty value is excessive and actual market value is the sale price then sale consideration can be taken as sale price i.e Rs. 27,00,000/-

Capital gain would be (2819000-(1302060*272/184)=8,94,216/- (you can deduct if any expense incurred for sale of house like brokerage , advertise etc.)

Tax amount is Rs. 1,84,208/-

Narendra Sonagra
CA, Ahmedabad
57 Answers

Not rated

Dear Sir,

1) Capital gain is calculated on market value or circle rate whichever is higher. In your case Market rate is higher therefore you are liable to pay capital gain on market rate i.e.28,19,000/-

2) Capital gain would be Rs.8,94,215 and tax would be 1,84,210.

Thanks

Vivek Kumar Arora
CA, Delhi
4825 Answers
1031 Consultations

5.0 on 5.0

In your case LTCG considering the deemed sale consideration u/s 50 C will be stamp duty value i.e. 28.19 lac calculate tax accordingly using CII

Nitin Jain
CA, Jaipur
214 Answers

4.7 on 5.0

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