Finalisation - sole proprietor

Yes under section 54 of the IT act if you sell a residential flat and buy another one you can claim exemption under section 54.

Have you included house property in your capital. Since you have 2 house you can give 1 house on rent and include such house in capital and increase your debt equity ratio. And in case of sole proprietors I think bank should take a look at all your asset and including your house I think you will make a great debt equity ratio.

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Thank you

Hi,

- Debt equity ratio is calculated for business only and it does not include personal assets and liabilities of the proprietor.

- In your case, loan from LIC will not be included in the liability of the business as it is for purchase of residential house. Same is with profit on sale of residential house.

- LTCG is 35 lacs and it would be exempt as cost of new house is more than capital gain.

- U/s 54, you can possess more than 2 house but exemption would be available only in respect of single house.

- Your personal assets will be treated as collateral security and will not be counted in the CC limit though you are proprietor.

Thanks

How can you show both house as self occupied you need to show one house as deemed let out.

And also what I think is in case of sole proprietor his personal assets are also considered while seeing the business because if you know that in case there happens anything wrong then your personal assets will also be used to pay your business liabilities off so I think the balance sheet you give to bank should include your house property because you are going to take loan and your asset includes your house.

It is not necessary that your balance sheet given in income tax and bank should be same.

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Hi,

Capital gain shall arising on account of sale of old flat shall not be taxable. You will get deduction u/s 54 for the same. You need to show the transaction in your return.

You can show all your houses in B/S whether it is self occupied, let out or deemed let out.

Hi,

1. Firstly, you can show all your house in your balance sheet even if its self Occupied.

2. Your capital gain on sale of old house will be exempt u/s 54 as you are investing in new residential house in the same year.

Dear Sir,

Hope you are doing well !

Yes, you will get the deduction u/s 54. However, exemption would be available only in respect of single house.

Long term capital gain is Rs 35 lakh which is calculated as below:

Sales consideration (Rs 1,20,00,000)-Indexed cost of acquisition (Rs. 75,00,000*272/240)=Rs. 35,00,000/-

The capital gain amount is not taxable as your new house cost is more than capital gain.

Yes, You should show all your houses in balance sheet as a capital assets.

Hi,

You can claim the exemption u/s 54.

Nothing is taxable as your new cost is more than capital gain. You need to show all other house in balance sheet.

You will get the deduction u/s 54. However, exemption would be available only in respect of one house.

You can show all your houses in your balance sheet.

Hi

You can show all your houses in balance sheet.

Since you are investing in new property ,you can claim exemption under sec 54 in order to save long term capital gain tax.