Tax implication on flat sale

Hi,

Please share exact date of purchase for calculation of Indexation cost.

1)Indexation cost is more than sales consideration.

2)You dont need to pay any tax.

Thanks & regards,

Payal Chhajed

1. In order to calculate capital gain, please let us know the month of purchase and sale.

2. No, in this case you don't need to pay capital gain tax.

3. Bank Interest can be added in purchase cost only if you have not claimed deduction of interest in earlier years. If you have claimed deduction u/s 24, then you cant add interest in the purchase cost.

Hi

1. For calculating indexed COA, use the following formula

Cost * CII of year of sale/ CII of year of purchase

Please provide the months of purchase and sale so that we can calculate the indexed COA.

2. It shall be capital loss in your case, hence no taxes.

3. You can add interest paid to COA if deductions in respect of such interest had not been claimed earlier.

Dear Sir,

1) Indexation will be calculated from 2011till the date of sale i.e. 2018. Indexed COA will be 26.25/184*280=39.94 lacs.

2) In case of loss, no need to pay taxes.

3) You can add bank interest if you have not claimed the benefit of interest under other sections of income tax.

Your LTCL is 6.45 lacs.

How the property was financed? According to it only it will be taxable in the hands of both.

Thanks

Indexation cost - it comes Rs. 38,80,434.78/-based on FY 11-12 cost inflation index. (Rs. 26,25,000/184*272).

CII for purchases- FY 11 12 184

CII for sales- FY 17 18 272

After adjusting indexation, the cost is more than the buying price then you do not need to pay any taxes.

Dear Sir,

As the property is sold in F.Y. 2017-18 so Indexed COA would be 38.80 lacs and long term loss would be Rs. 5.30 lacs. Previously I assumed it F.Y. 2018-19 as the date of sale.

As per income tax, owner of property is different from the legal owner as mentioned in the sale deed. If the property was financed both by husband and wife then the above calculation needs to be shown in their respective ITR's according to the amount contributed by each of them.

Thanks

Dear Sir,

1)Long term capital gain on any asset is calculated by subtracting the sale price from the inflation-indexed cost price.

Inflation-indexed cost price is = (Actual/Original price * CII for year of sale) /CII for year of purchase

In your case, it is a long term capital loss of Rs. 5,30,435/- because indexation cost of Rs. Rs. 38,80,434.78/- is more than Sales consideration of Rs. 26,25,000/-.

2) It is a capital gain loss. You do not need to pay taxes.

3) Bank Interest paid on this property to arrive at final buying price can be added in purchase cost only if you have not claimed deduction of interest in previous years. If you have claimed deduction u/s 24, then you can not add interest in the purchase cost.

Could you please share how the property was financed?

Warm Regards,

Karishma Chhajer

Hi,

1.Indexation is cost of acquisition*CII of sale yr/CII of purchase yr ,here it comes to aprox 39 lacs.

2.No ,it will capital loss.no tax there on

2.If no deduction claimed earlier then only you can add .

Hope it help

1.You have to calculate index cost by dividing the CII purchase (11-12 year by CII sale yr (17-18)multiply with sale amt

2. It will be LTC Loss not tax liability arise

3 Yes if loan has direct relation with this property interest can be added

1) Indexed purchase cost will be 26.25 * 272/184 i.e. 38.80 Lakhs. Loss under the head capital gain (long term) will be INR 5.3 Lakh.

2) In case after adjusting indexation, the cost is more than the buying price then there will be loss under the head "Income from long term capital gain" which you can set off with any other long term capital gains within same year or carry forward to further years for 8 years.

3) Yes, you can take dual advantage

Hi,

There is an indexation chart that you need to follow.

The indexed cost of the flat in 2018 will be = 26.25×272÷184 = 38.80lakhs

Since the indexed cost is lower than the selling price, you are not liable to pay capital gains tax.

Hope that helps.

Regards,

Nikhil

Bank Interest can be added to your purchase cost if you have not claimed deduction of interest in earlier years u/s 24

Regards,

Nikhil

Hi,

Based on the information provided by you, below is the working of Long term capital gain:

Sale Consideration : 33,50,000

Indexed cost of acquisition: 38,30,435

(26,25,000*272/184)

Taxable LTCG : NIL

Indexation for F.Y. 2017-18 : 272

Indexation for F.Y. 2011-12 : 184

Interest paid to the bank can be added to the cost only if you have not claimed deduction u/s 24 in earlier years.

Hope all your queries are resolved!