Capital gain calculation and investment in bond

Dear Sir,

Hope you are doing well !!

As you have already invested the amount in new property there will be no further tax liabilities on you. 

There is no requirement to invest the money in bonds.

There will a long term capital gain of Rs.12.5 lakhs.

It is calculated as below:

Sale consideration -Indexed COA= (Rs 21 lakh- Rs 8 lakh-.50 lakh)= Rs. 12.50 Lakh.

As mentioned earlier, 

As you have already invested the amount in new property there will be no further tax liabilities on you. 

However, the bonds should be bought within 6 months of the sale of the asset.

In your case, there is no requirement to invest the money in bonds.

Capital gain would be 12.50 lacs. Remaining capital gain is 3.125 lacs. Time limit for bonds is expired i.e. 6 months. 

Hello Sir,

To claim full exemption u/s 54F the entire sale receipts have to be invested.

In case entire sale receipts are not invested, the exemption is allowed proportionately.
[Exemption = Cost the new house x Capital Gains/Sale Receipts]

The exemption amount is calculated as per below formula= Rs.15.75*12.5/21=Rs 9.38 lakhs.

You need to pay the capital gain taxes on remaining capital gain amount of Rs. 3.12 lakhs i.e (Rs 12.5- Rs.9.38).

The capital gain amount would be Rs 12.5 lakh i.e. ( Rs 21 lakh-Rs 8 lakh-.50 lakh).

Hello Sir,

My answer is practical.

The total gain amount would be Rs 12.5 lakh and you will be able to claim the proportionate exemption of Rs 9.38 lakh on the same as calculated in my previous answer. 

The exemption amount is calculated as per below formula= Rs.15.75*12.5/21=Rs 9.38 lakhs.

You need to pay the capital gain taxes@20% plus applicable surcharge and cess on remaining capital gain amount of Rs. 3.12 lakhs i.e (Rs 12.5- Rs.9.38).

I hope you got my point. 

Hello,

Capital Gain would be Rs. 12.50 Lakhs.

Since you have sold land and purchased a new house property within the specified period, you will be eligible for exemption u/s. 54F. The exemption amount would be proportionate of sale consideration, i.e. Rs. 9.375 Lakhs.

The remaining capital gain would be Rs. 3.125 Lakhs, it would be taxable.

The time limit for purchase of bonds is 6 months from the date of sale, which is over.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Dear Sir,

Sorry for my previous answer.

The answer given by Ms Karishma is absolutely correct.

You will be required to pay the taxes on remaining amount of Rs 3.12 lakh.  

Since you have sold residential land now the only option available with you is to save capital gain by investing sale proceeds in residential house and if you are going to make any improvement in your house worth the remaining money you can invest same in capital gain account scheme and save capital gain.

Do you have any other income or this is your only income?

It would be great if we can have a personal consultation so that I can guide you better.

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

Thank you.

Please take phone consultation to discuss in length.

Hi,

Now there is no way to save capital gain as time limit for investment in bonds is six months from the date of sale of property.

If you have bought the land in 2002 for 1 lac, your indexed cost of acquisition cant be 8 lacs. it will be less than 3 lacs approx. Can you pls confirm the purchase cost and purchase price to arrive at correct capital gain amount.