Can I sell and buy a flat to save LTCG

I purchased two flats .One in 1998 and other in 2006.Subsequently, I inherited another house. I have sold a flat which I had bought in 1998 and wish to purchase another flat  at different location. What are the LTCG implications?
Asked 1 year ago in Capital Gains Tax from Chandigarh, Chandigarh
Hello,

You can purchase a new house property within end of previous year in which property is sold or within 2 years in case you invest that amount in capital gain account scheme till the time the property is not purchased.

In said case you can avail two benefits as deduction from sale value of property :

1. Indexation Cost of House Property Purchased in the year 1998 in place of original cost of purchase
2. Total Value of Purchase price of New Property

If you can give me exact figure than i can do proper working of capital gain and let you know taxability on it.

In case of nay further quarry you can contact me on
+91-9824798534 or vishrut1303@gmail.com
Vishrut Rajesh Shah
CA, Ahmedabad
512 Answers
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The LTCG on the sale of your flat bought in 1998 will have to be worked out with reference to the indexed cost of acquisition of the flat. The indexed cost of acquisition of is roughly 3 times if the asset is sold in the current financial year. The amount of capital gain is exempt u/s 54, if it is invested in acquisition of another residential house, subject to the fulfillment of conditions specified therein. Or if the sale proceeds are invested in capital gains bonds upto Rs 50 L, the entire capital gains will be exempt u/s 54EC, subject to the fulfillment of conditions specified therein.

You need to balance out your cash flows and tax liability based upon the facts of your case,by consulting a Chartered Accountant in your area.  
B Vijaya Kumar
CA, Hyderabad
459 Answers
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