Dear team, Have a question pertaining to long term capital gains. I had asked this question in the past. Asking with few more followup questions: Purchase details: ============== As per the sale deed the market value was 4,14,000. Stamp Duty cost 29,600. Registration fees 2,070. Exact Date of purchase: 8th July 2005 The loan was for 8 lakhs which was funded by LIC housing finance. I pre-closed this loan in 2015. Sale Details: ========== In January 2017 I sold the apartment. The value of the apartment as per paper is: 17,24,400 The buyer bought it from me for 22 lakhs. He paid the money in 3 installments. 1st Installment: 50,000 (Funds transfer) 2nd installment: 1.5 lakhs (Cheque) 3rd installment: 47,536.00 + 475,600.00 (cheques) Bank loan that the buyer borrowed: 1,476,864.00 (cheque) Other costs on the apartment: ======================== Regularization fee: 8,000 Monthly maintenance paid to society Property Tax paid to Greater Hyderabad Municipal Corporation I had done wood work in 2008. It cost me 60,000. I do not have any receipts for the same. I am essentially looking for following advice: 1. For computation would the cost of the apartment be calculated on registered value or the value for which I got the home loan. Home loan was 8 lakhs. 2. We pay regular maintenance and property tax for this apartment. Is this also something that I could include to get some relief. Is it mandatory to have receipts for the same. (This would come close to 1 lakh for the total ownership duration.) 3. I did furnishing in 2008 for 60,000. I do not have receipts. Could this be used to get some relief? 4. If we have an option to include item 2 and item 3 what would the final taxable figure be? 5. If they aren't allowed what would the taxable figure be? 6. If I understand correctly the REC/NHAI bonds should be equal to the taxable amount. If the taxable amount is 10 lakhs bond value must be 10 lakhs. Is that correct? 7. I sold the apartment in January 2017. a.)Till when do I have time to buy a ready to occupy apartment b.) Till when do I have time to buy a plot and build a house I am getting contradictory information on the duration ranging from 1 year to 3 years. Please help. Regards, Venkat K
Dear Sir,
Please find below answers :
1. Registered Value shall be considered
2. No benefit available of maintenance fees paid
3. Without documents proof not possible to get any relief.
4. Option Not possible
5. Taxable Capital Gain comes to Rs. 11,91,190/-
6. It should be equivalent to capital gain amount.
7. You can buy till 31/03/2019. However the sale proceeds should be invested in Capital Gain Account scheme on of after six months from sales of property i.e. June,2017 in your case
1. Sir for computation you will get the full value of house i.e. 8 Lakhs loan (which consisted of registration value and amount for completion of works, we guess) plus your margin money paid in Cheque or cash as shown in Papers.
2. Maintenence and Property tax is not deductible.
3. You can get relief for the works done. You can claim that in the absence of receipts also. A small amount.
4. Yes the bond value must be 10 Lakhs if that is the taxable value. But in your case we do not find the tax value as that as to calculate we need that what is the exact purchase cost including the loan from LIC (Your money + Bank Loan).
5. You can buy the property within 2 years from date of transfer. But till that time you need to keep the money in Capital Gains account Scheme.
Sir 1 years is applicable when you have already purchased any residential property before the sale. 3 years is for investing in construction of residential property on land which you already own.
Dear Venkat,
Please find the response below :
1. Registered Value shall be considered the purchase price.
2. No, you can avail the benefit of maintenance fees etc.
3. It's litigative and hence not advisable to claim the benift without proof. It's totally dependent upon the person assessing your case.
4. Not recommend
5. Taxable Capital Gain would be INR 11,91,189.
6. Correct.
7. If you intend to buy a flat, you can buy it before 31 July 2017. If you can buy flat beofre 31 July 2017, you can deposit the money in CGDS account and buy flat within 2 years (I.e. Jan 2019) from the sale of your flat or construct a flat within 3 years (i.e. Jan 2020) from the sale of your house.
Please feel free to call/revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
1) The registered value of the sale deed will be the cost of the apartment. You can also add the stamp duty paid for the purchase of the property. When the cost of the house was Rs 4Lakhs+ registration exps, how could you get housing loan for Rs 8 Lakhs?
2) Property tax and maintenance charges cannot be added to the cost of the acquisition. They are regular recurring costs to enjoy the possession of the property.
3) Small amount, there may not be serious issues.
4 & 5) The cost of acquisition will be Rs. 4,45,670, ignoring items 2 and 3 above. The indexed cost of acquisition will be Rs 10.09 Lakhs ( i.e., Rs 4,45,670*1125/497),
The sale value is Rs. 22 Lakhs.
The LTCG will therefore be around 11.91 Lakhs.
6) Yes you need to invest only the LTCG component in the REC/NHAI bonds.
7) a & b) You need to buy a flat within one year from the date of sale, i.e., by January 2018. If you are constructing an independent house, the time is 3 years.
