Capital gain tax on sold property

Hi,

- No ways to avoid capital gain tax. Now you are required to file her ITR as legal heir if she was having taxable income. 

Thanks

Since you are the heir now you need to file the return on behalf of her and since you had invested in another property which I believe is eligible for exemption from capital gain you will not be required to pay any capital gain as such.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

No LTCG if new property value is equal or more than sold property.

Hi,

No, there is no way to avoid capital gain tax.

However, if you have invested entire consideration in another property then you will be able to take the benefit of exemption u/s 54 (Assuming both are residential property). 

LTCG tax will be applicable @ 20.8 % on remaining amount.

Let me know sold propert price?

Hi Arijeet

You won't be liable to any taxes. 

However, you need to file your mother's ITR as a legal heir. Taxability of capital gain shall depend upon the amounts involved.

What was the nature of the property sold? Was it a land or a house property?

In case of sale of house property, amount invested should be equal to or more than the capital gain amount.

In case of sale of land, the entire consideration needs to b invested. If investment is less, proportionate capital gain tax needs to be paid.

Only on the basis of information that the new property is 10 lakh rs less than earlier property I can't tell you the capital gain tax because first we need to know under which section are you going to claim exemption and what is your capital gain amount, because in certain sections you only need to invest capital gain amount whereas in some section you need to invest entire sale consideration.

So please provide full information if you need clear answer.

Hi Arijeet,

Hope you are doing well !!

There is no way to avoid capital gain tax.

Now, you need to file your mother's ITR if she was having any taxable income.

However, we need further informations for complete advice.

Thanks & Regards,

Payal Chhajed

Exemption would depend on the LTCG and cost of new property.

Hi Arijeet,

Hope you are doing well !!

There are numerous slabs and sections under which you can save on tax if you reinvest your long-term capital gains.

Section 54: Under this section, you can avoid tax on capital gains from the sale of a house property if you reinvest the money to buy another property. You can claim tax exemptions under this section if you buy the new property one year before the sale or two years after the sale. In case it is under construction, the new property should be ready within three years of the old property’s sale.

The entire capital gains will be exempted where the amount of investment in new property is equal or greater than the capital gains earned.

Section 54EC: You can claim tax exemption by using the amount you gain from selling an asset to buy bonds issued by NHAI and REC.The bonds should be bought within 6 months of the sale of the asset. The maximum amount you can invest in this way is Rs. 50 lakh. It will lock your money for 5 years.

Section 54F: You can claim total tax exemption by using the money you gain from selling any asset (except a house property) to buy a house property, which needs to be bought one year before the sale or two years after thse sale. For under-construction properties, the new property should be ready within three years of the asset’s sale. 

Unlike Sec 54, here the entire capital gains are exempted when the amount of investment is equal or greater than the net consideration/ sale proceeds else the proportionate exemption is allowed.

Capital Gains Account Scheme (CAGS):  if you do not get a chance to invest in a profitable property immediately and still want to save your long-term gains from being taxed, you can invest your capital gains in CGDAS by approaching any public sector bank. The timeframe for the purchase or construction of the property remains unchanged in this case as well. But you can utilise this account momentarily so that you save your gains from being taxed and have more time to finalise a property for reinvestment.

It is required to deposit such unutilised capital gain in the capital gains account before furnishing return of income but not beyond due date for furnishing return of income.

Thanks & Regards,

Payal Chhajed