Hello, We sold (me & my brother) inherited property, which our father purchased in year 1968 of value 7000, FMV (said property) in 2001 is 62 lacks, property sold of value 2.3 CR in the month of June, 2018. Amount we divided between us and kept as normal FD with saving bank account since last 1 year. Queries: 1. Do we need to shift the amount to capital gain account before 31 July, 2019? 2. How much amount we need to submit in capital gain account, if FMV 2001: 62 lacks. sold- June 2018 : 2.3 CR 3. Please calculate the capital gain tax for the said amount, if we pay taxes on gains then also do we need to shift the amount in capital gain account? 4. For FMV 2001, what authorized document/form is required to furnished? 5. How much is penalty: If amount submitted in capital gain account after 31st July or between 31st July- 1st sept, 19. Can, I file return or revised the return in the month of Sept,19? Please guide. Thanks Ankit
1. Yes if you want to invest further in the available options.
2. Rs.2.3 CR.
3. If you want to pay tax then there is no need to shift the amount Rs.11,21,120.
4.Valuation report from registered valuer.
5. No exemption would be available if amount deposited after 31.07.2019.
Dear Ankit,
1. It is required to deposit such capital gain in the capital gains account before furnishing return of income but not beyond due date for furnishing return of income.
Normally, the due date of filing Income Tax return is July 31 for the previous Financial Year. Under extraordinary circumstances, it can be extended by the Finance Ministry.
2. The Capital gain amount would be Rs 56.4 lakh. You need to deposit the same in CGAS.
3. The capital gain tax would be 20.8 % on Rs 56.6 lakh.
4. Valuation report from registered valuer.
5. The capital gain exemption would not be available if you deposited after 31st July.
6. Yes.
1. Capital gain of each person would be around 28.20 lakh and tax on same would be 5.64 lakh.
2. You need to shift the amount only if you think you will use it in future to purchase a house or construct a house otherwise you need to pay tax on same and dont deposit it anywhere.
3. For FMV of 2001 you need a report from government approved valuer.
4. If you want to claim exemption from capital gain you need to deposit it before 31st July although you can revise your return till 31st march 2020, but to claim exemption you need to deposit it before 31st July.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
Hi Ankit
1. Yes
2. 56.4 lacs if the property was a residential house property. If it was a land, entire 2.3 cr.
3. No. If you pay taxes, no need to deposit in CGDS. Tax would be 11.75 lacs plus interest for non payment of advance tax.
4. Either calculation can be done on the basis of circle rate. Or the best option is to get a valuation report from registered valuer.
5. The last date to deposit in CGDS is date of return filing or due date for return filing, whichever is earlier. Due date is 31st July. If due date gets extended, you may deposit till that date.
1. Yes, if you want to save on taxes, you'll have to shift the amount of capital gain to the capital gain account (Open either in Savings deposit/ term deposit)i.e., 56,40,000 Rs. on or before 31st Jul'19.
2. The sale consideration 2.3cr
3. The total capital gain would be 56,40,000 Rs. The amount of Tax on the said gain would be 20.8 % on the LTCG i.e., 11,73,120 Rs.
4. Valuation Report from the valuer who is a govt approved person.
5. You will not be able to get the benefit of exemption.
Thank you
Answered serially
1. Yes. Before filing the income tax return for 2018-19, the capital gain i.e 56.4 lakhs (for both) should be transferred to CGAS account. I hope registration is done in 2018-19.
2. 56.4 lakhs
3. The tax on long term capital gain is RS. 11,28,000 (i.e @20% since indexation is done).
4. Usually every state will have a fair value guideline for the land. It must be produced to appropriate authority if at all it is asked for i.e during scrutiny. For filing ITR it is not required.
5. If you file return after 31st July, then a penalty of RS. 5000 will be attracted. There is no penalty for delayed deposit to CGAS account. You'll not get the exemption under 54 if you do not deposit the capital gain on time.
Hello,
1. Yes, you need to shift this CG amount to CG A/c.
2. You need to transfer the CG amount, i.e Rs. 56.40 Lacs approx (assuming the sold property is a house)
3. Tax on it would be Rs. 11.75 Lacs approx.
4. Valuation report from an Income Tax Certified Engineer.
5. The tax would be payable if not deposited on time with interest if delayed in payment of tax and penalty for late filing of return.
6. Due date of return has been extended to 31st Aug 19. Revised return is filed after the original return is filed and not processed.
I hope this answer satisfies your requirement.
Regards,
CA Hunny Badlani
Thanks for answer, One more question: To file ITR, date gets extended till 31st Aug, 2019, Does it also mean: I can transfer/deposit the Capital gain amount to Capital gain accounts by 31st Aug? Will this attract any penalty & exemption under 54 is still valid?
Yes sir you can deposit till 31 August and claim exemption.
- You can deposit till 31.08.2019. There would be no penalty and exemption would be allowed.
Yes, you can deposit till 31st August now. No penalty. Exemption shall be provided.
Yes, you can transfer/deposit up to 31st Aug. 2019.
Hi Ankit,
Yes, you can deposit the Capital gain amount to Capital gain accounts by 31st Aug without any penalty.
Yes, the exemption u/s 54 is still valid.
Yes the time limit to deposit in CGAS has also been extended till August 31. If you do not deposit then there is no fine/penalty. You'll not get exemption u/s 54 or 54F.
Hello Sir,
Yes, you can deposit the Capital gain amount to Capital gain accounts by 31st Aug.
There will be no penalty on the same and you will get the exemption under 54.
