LTCG tax

So first of all let's forget the original purchase cost as it's a very old property.

Your sale consideration would be 14.60 lakhs as it's more than market value and you are saying that market value of land for cost of acquisition is 21000 whereas the neighborhood land was sold for a higher value so we can take that as a base and you can ask the valuer to prepare a report mentioning that fair market value of such land is also 35700 because the neighborhood land was sold for similar value and so you could save some tax as cost of acquisition would increase. So your indexed cost of acquisition would be around 312000 and so your capital gain would be around 11 lakh and now you are saying that you have booked a home for 60 lakhs so if you invest whole 14.60 lakh received from this property into that house you will not have to pay any capital gain or invest in bonds given that the construction of house is completed in 3 years. Otherwise invest upto 11 lakhs in bonds to save capital gain. If you think of investing in bonds you need to invest only the capital gain amount however if you of saving tax by investing in residential property you need to invest entire sale consideration.

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Thank you

Hi,

Hope you are doing well !

As you have already invested 60 lakh in new property which is more than your land sales consideration, so you will not be liable for any capital gain.

You will get the exemption u/s 54F provided the construction will be completed within 3 year assuming new property is under construction.

*Please note that to claim full exemption u/s 54F the entire sales consideration have to be invested.

ITR 2 is applicable for individuals and HUFs who do not have any business income. Meaning, anyone having incomes from Salary, House Property, Capital Gains or Income from Other Sources (combination of any) can use ITR 2.

Hence, ITR-2 will be required in your case.

Hi

Since it was a land that was sold, entire sales consideration needs to be reinvested to claim capital gain exemption under section 54 F.

The flat booked in Dec 17 will be eligible to claim exemption.

Please clarify what is 14.6 L value? If actual sales consideration is 13.5L and it is equal or more than the stamp duty value of the land, 13.5L shall be considered and you need to reinvest 13.5L in total. (Flat -54F and bonds under 54EC).

For calculation of capital gains, FMV of land as on 1.4.01 shall be needed. Any cost of improvement post 1.4.01 shall be indexed. All previous costs shall not be allowed.

Further, such indexation is done only to arrive at the capital gains. You need to invest entire 14.6 lacs to exempt entire capital gains.

14.6 lacs shall be considered for calculation of capital gain since stamp duty value is more than actual sales consideration.

Such 8 lacs investment shall be allowed as Exemption under section 54 F.

Further 2 lacs investment shall be allowed as Exemption under section 54 EC.

You need to invest further 4.6 lacs to exempt entire capital gains. Otherwise, proportionate capital gains shall become taxable.

Hi,

As stamp duty value is more than actual sales consideration so stamp duty value will be considered for capital gain calculation i.e. 14.6 lakh.

You will be allowed following exemptions:

1.8 lakh u/s 54F

2.2 lakh u/s 54EC

You need to invest further 4.6 lakh to claim entire capital gain .

Hi

Since you are selling piece of land, full value of sales consideration need to be invested that is 14.6 lacs.

You already invested 10 lacs,need to invest 4.6 lacs more to claim exemption.

Dear sir I have taken into consideration all your investment plan and cost indexation that's why I said that your indexed cost of acquisition would be around 3 lakh as mentioned in my above answer also I said that if you invest in house 60 lakh then you will face no capital gain only if the house is completed within 3 years and then you would not require to invest in bonds also. Even if the negotiated price is 13.5 and 14.6 is according to stamp value then also my capital gain calculation is correct as 14.6 will be considered for capital gain calculation.

I hope that I have covered all your points.

Since it was a land sale, entire sales consideration needs to be reinvested to claim capital gain exemption under section 54 F.

14.6 lacs will be considered for the purpose of computing capital gain since stamp duty value is more than actual sales consideration.

You will get exemption of 8 lakhs u/s54 and 2 lakhs u/s 54 EC. You will further need to reinvest 4.6 lakhs to be able to save the total capital gains tax.

Regards,

Nikhil.

Hi,

Sorry for misinterpretation.

You will get exemption of RS 8 lakh u/s 54F and 2 lakh u/s 54EC.

You will need to further invest RS 4.6 lakh to save entire capital gain.

Hi,

- ICOA would be Rs.99,895 and LTCG would be Rs. 12,50,105.

- Investment in flat will be sufficient to claim exemption. No need to invest in bonds as the value of LTCG is less which can be easily covered with the investment in flat.

Thanks