Capital Gains related from the sell of the house

Dear Sir,

Hope you are doing well !!

1. There will a long term capital gain of Rs. 73 lakhs.

It is calculated as below:

Sale consideration -Indexed COA= (Rs 110 lakh- Rs 37 lakh)= Rs. 73 Lakh

The indexed COA= Rs 17 lakh /137*301=Rs. 37,35,036.

The capital gain will be taxed at 20.8% 

2.Yes, you can do the same.

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.

3. 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.

So, you can invest the capital gain amount in two properties including already bought & get capital gain exemption.

4. Yes, you need to show 1 property purchased in this year against capital gain and buy 1 more property only as per recent change in taxation.

5.No, you will get the capital gain exemption.

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 of original asset. 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.

We may assist you in entire procedure.

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

Hi

1.Calculation of long term capital gains is as follows :

Sales consideration less cost of transfer less indexed cost of acquisition less indexed cost of improvement

Sales less i.e RS. 110 lakh less indexed cost of acquisition i.e . RS 37.35 lakh 

Indexed cost of acquisition

RS. 17 *301/137  RS . 37.35 lakh 

Long term capital gain is Rs. 72.65 lakh.

2. Yes  As per section 54 EC of the Income Tax Act, 1961 lays down the provision that capital gains are exempt from tax, if the long-term capital gains are invested in specified investment instruments within a pre-defined time period. ... Exemptions under Section 54EC are only available on gains from transfer of long-term capital assets.

3. Yes 

4 Yes

5. No.

Your capital gain would be around 60.33 lakh and if you invest 9 lakh in new house you will have to pay 20% tax on remaining 51.33 lakh.

Yes you can invest in property and bond at the same time no harm in that.

No you cannot as section 54 says one can save capital gain by purchase one house. You might invest in 2 house at a time and take benefit of special provision but not in three house.

Didn't get your 5th question.

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Thank you.

Capital Gain will be 72.65 lacs. Property purchased on 27th Aug will be eligible for capital gain exemption. You can buy bonds upto 50 lacs and also invest in another property.

Yes, you can buy only one more property. You can purchase one property with capital gain. Capital Gain Tax will not be applicable as you have initiated the sale for first property.

Hello,

1. As per the details provided, your long term capital gain would be around Rs. 70.33 Lakhs.

2. Assuming the property sold is a residential property, you are required to invest the capital gain amount. Therefore, for full exemption, you need to invest the whole amount of capital gain. You can invest in both a residential property us/. 54 and in specified bonds u/s. 54EC.

3. For exemption u/s. 54 you can invest in a total of two residential properties. Since you have already invested in one property, you can further invest in another one property.

Kindly rephrase your further queries for a better resolution.

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

Regards,

CA Hunny Badlani

Hi

1. Capital gains would be around 70.33 lacs.

2. Yes, you may do the same. Since you have already invested 9 lacs, you may deposit 50 lacs in 54EC bonds to claim capital gain exemption of 59 lacs. You may further invest into another residential house property. Capital gain exemption is available for investment in upto 2 house properties.

3. Yes. Capital gain exemption will be available provided the property sold for 1.1 cr was a residential house property and not a land.

4. You may purchase more than 1 property and claim capital gain exemption.

5. Yes, you may purchase. Capital gain exemption shall be available.

I assume the property being sold is a residential house property and not a land. Exemption under section 54 is to be considered.