• How much total tax do I have to pay under long term capital gains

Recently i have sold a house on dec 6th 2019 . the total regestration value of the house is 35 lakhs 

i bought this house in the year 9th of 2017, the toal regestration value is 13.50 lakhs. the toal loan it ook to buy this house is 28.6 lakhs

when i sold this house i repaid the loan of 19.40 thousand . i only got 15.60 lakhs in hand .

a) please let me know wether i fall under short term or long term capital gains and how much tax i have to pay
b) i am planning to buy another house ,so how much value should be shown in the regestration value ?

c) can we buy two properties? with in how many years i should buy this.

this property is on the name on my wife when it was sold ,but i paid the loans as i am the salried person .

kindly help me on the same.
Asked 13 days ago in Income Tax

You have purchased this on 9th of which month?

Did you pay the 100% purchase amount?

Why was loan taken for 28.6 lakh when purchase price was 13.5 lakh.

Please answer the above question so that I can assist you further.

 

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

Thank you

Naman Maloo
CA, Jaipur
3218 Answers
32 Consultations

5.0 on 5.0

Hello,

 

Kindly provide the complete date of purchase and sale of the property to determine whether it would be Short Term /Long Term Capital Gain and the tax amount.

I hope this answer satisfies your requirements.

 

Regards,

CA Hunny Badlani

Hunny Badlani
CA, Madhya Pradesh
2093 Answers
6 Consultations

5.0 on 5.0

Hi

 

It would be LTCG. Gain amount around 20-21 lacs on which tax would be around 4.3 lacs.

 

If you are planning to buy a house property, the registration value should be 21 lacs (equal to capital gain amount) in order to claim full capital gain exemption.

 

Yes, you may invest in 2 house properties.

 

The investment has to be made within 2 years of sale of property, so by Dec 21 OR construct a house property within 3 years (Dec 22).

However, if the investment is not made before due date of return filing for FY 19-20 (30 Nov 20) or the actual fate of return filing, whichever is earlier, the capital gain amount has to be deposited in a CGDS account. 

 

Lakshita Bhandari
CA, Mumbai
4733 Answers
294 Consultations

5.0 on 5.0

If the registration cost is less than the actual consideration paid, kindly let us know what costs have been attributed by the builder for the remaining consideration so that the benefit of the same ca be availed.

 

We may discuss the issues in detail over a phone consultation for proper tax planning. 

Lakshita Bhandari
CA, Mumbai
4733 Answers
294 Consultations

5.0 on 5.0

Since the period of holding is more than 2 years, the gain would be considered Long Term Capital Gain.

For full exemption, the capital gain amount is to be invested in another house property.

The time limit for investment in the purchase of house property is 2 Years from the date of sale and for construction of the property is 3 years from the date of sale of old house property.

 

Hunny Badlani
CA, Madhya Pradesh
2093 Answers
6 Consultations

5.0 on 5.0

Dear Sir,

 

Hope you are doing well !!

 

To calculate the long-term capital gains tax payable, the following formula is to be used:

Long-term capital gain = full value of consideration received or accruing – (indexed cost of acquisition + indexed cost of improvement + cost of transfer), where:

Indexed cost of acquisition = cost of acquisition x cost inflation index of the year of transfer/cost inflation index of the year of acquisition.

Indexed cost of improvement = cost of improvement x cost inflation index of the year of transfer/cost inflation index of the year of improvement.

 

In your case, There will a long term capital gain of ~ Rs.20 lakhs.

             

The capital gain will be taxed at 20.8% i.e. 20.8% on Rs 20 lakh.

 

- With effect from Assessment Year 2020-21, the Finance Act, 2019 has amended Section 54 to extend the benefit of exemption in respect of investment made in two residential house properties. The exemption for investment made, by way of purchase or construction, in two residential house properties shall be available if the amount of long-term capital gains does not exceed Rs. 2 crores. If assessee exercises this option, he shall not be entitled to exercise this option again for the same or any other assessment year.

 

-You can claim an exemption from LTCG, under section 54 of the income-tax Act if the LTCG is reinvested in a new residential property located in India within the specified time frames. Where the new property is purchased, the gain is required to be reinvested either within 1 year prior to sale date or 2 years after the sale date. Where the new property is constructed, the time period prescribed for the reinvestment is within 3 years from the date of sale of the original asset.

 

 

-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.

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.

 

 

Please note that in order to claim exemption, you need to invest the capital gain amount if a house property is sold. However, in case of sale of a land, entire sales consideration needs to be invested.

 

Payal Chhajed
CA, Mumbai
4309 Answers
69 Consultations

5.0 on 5.0

It is advisable to take a phone consultation for detailed discussion.

Payal Chhajed
CA, Mumbai
4309 Answers
69 Consultations

5.0 on 5.0

It'll be a long term capital gain.

However I am not sure about your cost calculation.

It would be better if we can have a phone consultation to discuss it in detail.

Naman Maloo
CA, Jaipur
3218 Answers
32 Consultations

5.0 on 5.0

Hi

This is a long term capital gain.

If you need full exemptions than either buy a another house property  within 2 year from the date of sale or construct a new house property in 3 years from the date of sale of old house property. 

Karishma Chhajer
CA, Jodhpur
1670 Answers
11 Consultations

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