I have sold a site in April 2016 for 30 Lakh which was purchased 20 years back. Considering the indexing, purchase cost of the site is around 5 Lakh. With the intention of purchasing an alternate property, money was parked in LTCG a.c. at SBI before the due date on [deleted]. Unfortunately could not purchase any property till this date nor able to buy any now. By April 2019 I will be completing 3 years after the sale of my site. Since the time is short, I have decided to pay LTCG Tax. Now my question to you is: 1. Tax I need to pay is 20% of 25 Lakh ie. 5 Lakh + 4% Education cess on Tax ie. Rs.20,000. Total Rs. 5,20,000 OR I NEED TO PAY INTEREST on above amount which I was suppose to pay from April 2016?? 2. If interest has to be paid, from when and what percentage? 3. If interest has to be paid, I fail to understand, why govt suggests to keep the amt in LTCG a.c. from Nationalised Banks for a paltry 3% interest pa whose interest is also taxed. 4. If interest need to be paid, what will be the total tax amount along with the interest?
Hi
The calculation is correct.
No interest shall be levied. The capital gains become taxable in the year in which the time limit for reinvestment expires. Your time limit for 3 years shall expire in April 19. The capital gains shall thus be taxable in FY 19-20. If advance tax is paid on time, there shall be no other interest.
Hi,
Hope you are doing well !!
Yes, your understanding is correct about tax calculation.
If the amount deposited in the Capital Gains Account Scheme is not utilized within the time limit mentioned, then it shall be treated as income of the previous year in which 3 years expire (from the date of transfer of the original asset).
Accordingly, you will be liable to pay only capital gain tax amount provided the advance tax will be paid within time.
Thanks & Regards,
Payal Chhajed
You mean, my tax liability will be Rs.5,20,000 or Rs.5,20,000 + interest from date of sale???
It will be RS 5,20,000.
520000
Hi,
Your tax liability will be Rs. 5,20,000.
No interest will be levied on the same.
Hi
Your understanding about tax calculation is absolutely correct.it wll be 520000
LTCG becomes taxable when timelimit of 3 yrs will expire.Unutilised amount will become taxable in next FY ie 2019-20.
No interest will be levied if advance tax paid on time.
Hope it helps
You don't need to pay any interest you just need to pay the capital gain tax.
You can go through the provision of section 54 which clearly states that if person fail to utilize the amount he needs to pay capital gain tax as income of that year in which 3 years term expires.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you
Yes. 5,20,000.
Hi,
- Tax would be Rs.5,20,000. No interest in your case.
Thanks
I continuation to my previous question, Already I am staying in my own house constructed 11 years back, purchasing site in my own earning, and constructing house with SBI loan and claiming interest subsidy. But I have not availed LTCG Tax waiver in my life time. Am I eligible for LTCG Tax waiver?
There is nothing like LTCG tax waiver.
LTCG tax can only be exempted if you do the eligible investment such as investing in Nhai/rec bonds or investing in another residential house etc.
Yes you can claim ltcg exemption since you only own one house as of now.
If you have any other query or you need any further information you can also get a consultation session.
Hi,
It is a long term capital gain exemption and yes you can availed it.
Yes, you are eligible u/s 54F.
Yes, you are eligible for LTCG exemption.