Capital gains tax

Hi

In order to calculate capital gains, sales consideration shall be reduced by the indexed cost of acquisition.

Since you had purchased the property before 2001, the FMV of the property needs to be determined as on 1 April 2001 and the same shall then be indexed to arrive at the indexed cost of acquisition.

The FMV can be determined by getting a valuation done or by considering the stamp duty value of the property in 2001.

Sir you need to first get the valuation report for the said property as on 01.04.2001 and after that capital gain could be calculated.

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Thank you.

Dear Sir,

Hope you are doing well !!

Amount of capital gain would depend upon sale price, sale date, purchase price and purchase date.

As the date of acquisition falls prior to 1 April 2001, you have a choice to consider the Fair Market Value (FMV) of the property as on 1 April 2001 as your acquisition cost. 

It is advisable to get the FMV/ valuation of the property as on 01.04.2001 done from the registered valuer.

Government-approved valuers follow a standard process for the valuation and provide a detailed report.

“Assumptions of any type for consideration of value shall not be entertained by the income tax department. In case of any enquiry, the department will consider the value stated in the valuation report from a registered valuer,"

The capital gain will be taxed at 20.8%. You can save tax by investing the sale amount in a new house or purchasing 54EC capital gain bonds. 

For further discussion and clarification you can avail phone consultation on tax full.

Hello,

Since the property was acquired before 1st April 2001, you need to get the valuation report for the property as on 1st April 2001, this would be considered as your cost of acquisition of the property, which then would be indexed till the year of sale. The cost of improvements would also be indexed till the year of sale.

Reducing the indexed cost of acquisition and improvements from the sale consideration would give you the capital gain amount which would be taxable at 20% plus cess as applicable.

I hope this answer satisfies your requirements. For further understanding and capital gain calculation, you can contact us directly or take a phone consultation.  

Regards,

CA Hunny Badlani

- tax would be Rs.1.62 lacs considering actual cost of acquisition.

No you should contact government approved valuers in your own city or ask for local municipality to provide fair market value of such property.

- For FMV, get the valuation report from the govt. approved valuer as on 01.04.2001.

You would need to consult a registered property valuer.

We may assist you with obtaining the valuation certificate.

We may assist you in entire procedure.

Hi

Capital gain is calculated by Sale considered less indexed cost acquisition . Capital gains taxed @ 20.8%