• How much tax will I have to pay?

I am a senior citizen. I have worked for 34 years and i have promptly paid IT for all these years as per my salary. Now since 3 years i am not paying any IT since the rebate of 1.5lac as per sec 80C and my pension after rebate doesnt come under tax. I want to sell a site allotted by BDA in the year 1988. I don’t have any other property in my name. The proceeds plus my savings will be used to buy another site on which im planning to build a house. The transaction s slightly above a crore. 

A.How much tax will I have to pay? 

B.Can I register the property jointly with my son? 

C.Can he avail IT rebate by taking a home loan? 

D.Whole life i have paid tax promptly. But i have not declared the interest on income on bank deposits. Will i be penalised? If so wat s d extent? 

Kindly advise.

Asked 1 year ago in Capital Gains Tax from Bangalore, Karnataka
Dear Sir,

Firstly, even if your income after deduction is less than slab rate, you are required to pay itr. So, I recommend you to immediately file ITR for last two years. We can help you in filing ITR. Please reach out to us at , if you need any help.

Now coming to your questions.

1. If new property which your purchasing is a residential house property, then you don't need to pay any taxes. You have to either buy the new property before return filing date or deposit the sale proceeds of old house in cgds scheme before return filing date and then purchase new property within 2 years from the date of sale.

2. Yes, you can do so, keep your name in first holder.

3.No, he will not be able to take any IT rebate.

4. Yes, you are liable to pay taxes on interest. We need to know the interest amount on which taxes has not been paid.

Please feel free to call/revert in case of any doubts

Thanks and Regards
Abhishek Dugar
Abhishek Dugar
CA, Mumbai
2929 Answers
123 Consultations

5.0 on 5.0

You can invest in construction. Not in purchase of Land.
Shyam Sunder Modani
CA, Hyderabad
1408 Answers
95 Consultations

5.0 on 5.0

You can claim tax exemption under section 54F , details are given below:
Section 54F: Capital Gain Exemption of Any Property

The section 54F gives you exemption from the capital gains even if your sold property is not a residential property. But, the new property must be the residential property. This rule promotes the purchase of a residential house.
The Exemption under Section 54F

The exemption can be for the full amount of capital gains.

The capital gain amount can be invested in the capital gains account till it is utilized for purchase or construction of a house. The deposit in capital gain account should be before filing income tax return.
Conditions of Section 54F

    The exemption is allowed only if the new property is a residential house.
    The exemption is allowed, If you did not have any residential property before the new house.
    The purchase of new residential house should be within one year before or 2 years after.
    The construction of residential house should be completed within 3 years.
    The residential house should be in India.
    The assessee should sell or transfer the new house within three years of its purchase or construction. If it happens, the capital gains exemption would be withdrawn similar to the section 54.

Calculation of Exemption Under Section 54F

    The total capital gain would be exempted if 100% sale proceeds is invested in the residential property.
    If full capital gains is not invested, exemption shall be allowed proportionately. The exempted amount would be calculated according to the following formula.

Capital Gain  X   Amount Invested

Net Sale Consideration

The exemption can’t be more than the capital gain.
Vishakha Agarwal
CA, Bangalore
431 Answers
56 Consultations

5.0 on 5.0

As  for your other queries:

1) tax amount depends  upon capital gain amount on sale of the site.
2) yes you can register property jointly with your son, it will not affect capital gain exemption.
3) you can take home loan  for IT rebate, as it falls under separate head, you can still avail capital gain tax exemptions.
4) if you bank interest income is less then rs10000, it is exempt, over and above is taxable.
 as now all bank accounts are link, it would be advisable even though bank interest amount is less then Rs 10000, do declare it in your IT return.
Vishakha Agarwal
CA, Bangalore
431 Answers
56 Consultations

5.0 on 5.0

Dear Sir,

I think your query is already answered by our professional colleagues.

For any further clarification feel free to contact us. 
Shiv Kumar Agarwal
CA, Delhi
258 Answers
58 Consultations

5.0 on 5.0

Hello Sir,

No Tax shall be paid if you buy a house property against the sale proceeds of the old property.

Yes, you can register the property in joint name.

Yes, your son can avail IT benefits to the extent of his share in the property.

Interest on Deposits is taxable. It is advised to preferably start paying taxes on the same.

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Rohit R Sharma
Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

5.0 on 5.0

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