Hi, I am going to sell my home for 80 Lakhs, which is under home loan for 24 lakhs. we have calculated that indexation of that house 52 Lakhs. so much i have to pay Tax.. Please suggest.
Hi
I assume it is a long term capital gain. The capital gains would be 28 lacs. No exemption shall be provided for repayment of it's loan.
Taxes would be @20.8% of 28 lacs i.e. 5.824 lacs.
You may invest in a new residential house property or section 54 EC eligible bonds to claim capital gain exemption.
still my capital gain is only 56L (80-24(loan)), want to pay tax for 28Lakhs? if yes, Please tell me is there any other way to reduce tax than investing on another property?
Dear Sir,
Hope you are doing well !!
You need to pay the taxes on capital gain amount of Rs 28 lakh (80-52).
Home loan and Capital Gains Exemption are two separate things. You can claim the Capital gain exemption only if you use the money from the sale of the property to buy another house. The purchase of new house has to be done one year before the sale of the house or 2 years after the sale of the house. The property should be bought in the name of the seller. Income tax department is not concerned if you used the sale money for repaying the home loan or not.
Alternatively and/or additionally, you can invest the capital gains of up to Rs 50 lakhs in bonds of NHAI or REC, within six months of its accrual and get the exemption u/s 54EC.
Your capital gains are 28 lacs i.e. 80-52.
You may purchase section 54 EC eligible bonds for 28 lacs to exempt entire capital gains.
Such bonds shall be redeemable after 5 years. Only interest received on such bonds shall be taxable. There would be no taxes on redemption after 5 years.
Your capital gain would be 28 lakh and tax on same would be 20% of 28 lakh.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you
Yes you can save tax by investing this 28 lakh in another flat or in bonds mentioned under section 54EC.
Hello,
As per the details mentioned by you, Your LTCG Long Term Capital Gain would be Rs. 28 Lakhs (Rs.80 L - 52 L)
Taxable at 20% plus.
I hope that this answer satisfies your requirements.
Regards,
CA Hunny Badlani
You can use the SEc. 54EC exemption for investment in specified NHAI/REC Bonds. These bonds come with a lockin period of 5 years.