I am an NRI and am selling a property in India for 2cr. The property was purchased of Rs 66lacs in 2006 (incl stamp duty etc) and current index value is 1.44 cr...Additionally I have spent Rs 24 lacs on refurbishment and upkeep of the property. What is my total capital gains liability?How much of it is TDS?
Dear Sir,
Your capital gain will be INR 56 lacs. However if 24 lacs is for major refurbishment than it can be deducted from your capital gain gain and capital gain would be INR 32 lacs.
But out of 24 lacs whatever amount is for normal upkeep, then it cannot be deducted.
Please feel free to call/ revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Hi,
The Capital Gain is 2 Cr less Indexed Cost of acquisition Rs. 1.44 Cr Less Indexed Cost of Improvement (I assume it to be 24 Lakhs in the absence of indexed cost) = Rs. 32 Lakhs.
Regarding TDS, 1% TDS is applicable in case the seller is a Resident. But since you are not a Resident in India, the buyer will have to make TDS at 20.6% on the Capital Gain Amount.
You can claim Full exemption from Capital Gain Tax by investing the Capital Gain Amount (Rs. 32 Lakhs) in Capital Gain Bonds (REC or NHAI) within 6 months from the date of sale. You can claim Refund of the TDS amount by filing your Income Tax Return in India
Dear Sir,
For calculating capital gain tax of your property we need to calculate indexation of the cost of property which would roughly come to aroung Rs 1.43 crores . Which year the improvement /refurbishment of the property was done?? We need that year to again calculate indexed cost of the same. Without indexation the cost would roughtly come to 1.67 and your sale value is Rs 2 crores . SO the capital gain would be 33 lacs.
Long Term Capital Gains is taxed at a Flat rate of 20% plus SC+EC+SHEC hence it would come to 20.6%.
In order to compute exact capital gain you may provide the exact dates and value of the property purchase , improvement and sale date.
For any further clarifications you may write at ria@manishnagpalandco.com
Thanks & Regards
Ria Nagpal
Dear Sir,
Total Capital Gain shall come to Rs. 56 Lacs. If its only income during the year than TDS liability thereon should come to 12 Lacs. Still it is always advisable to get TDS Certificate from department for rate purpose so at later date you do not face any legal trouble.
Hello Sir,
The LTCG in your case is Rs. 56 Lacs which will be taxed @ 20%, unless you invest it in any tax saving mechanism.
TDS shall be deducted @ 20.6% on the entire sale proceeds which in your case is Rs. 2 Crore.
IN order to reduce the TDS percent, you may apply to your assessing officer to grant you a Lower Deduction Certificate.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
When you have done improvement. We are taking it as March 2006 only.
The total capital loss is -372234
STATEMENT OF LONG TERM CAPITAL GAIN
Particular
Sales Price/Year
Indexed Cost/Year
Transfer Expenses
Indexed Cost of Improvement
Exempt
Capital Gain
PROPERTY
20000000.00
(30/12/2016)
14939638.00
(01/03/2006)
0.00
5432596.00
0.00
-372234.00
Total
20000000.00
14939638.00
0.00
5432596.00
0.00
-372234.00
PROPERTY - Value of property as per stamp valuation authority: 20000000; Cost: 6600000 * (1125/497) = 14939638; Cost of Improvement: IMPROVEMENT-2400000 * (1125/497) = 5432596
If the cost of refurbishment is part of improvements / additions to the property, you can claim the benefit of indexation even for the amount of Rs. 24 L. However, if the amount is towards maintenance of the property, in the nature of upkeep of the property as mentioned by you, you will not be able to claim this as part of the cost of acquisition of your property.
Assuming that the cost of upkeep of the property cannot be claimed as the cost of acquisition of the property, the indexed cost of acquisition of the property as mentioned by you is Rs. 1.44 Cr. The Long Term capital gains will be Rs 56 L.
You can avail exemption u/s 54/ 54F,54EC,54ED and 54EE, subject to fulfilment of conditions specified therein.
If you are not able to such exemption, your tax liability will be 20.6% (including cess) of your LTCG, i.e., 11,2 L. If you are not a senior citizen,without business income, you need to pay advance tax also.
