Hiii
Income Tax is on tax on Income thus in your case you have to pay income tax if any under the head of capital gains, for exact calculations please provide date of purchase of site with amount , improvement cost incurred if any and sale date.
Income tax
I am a housewife and occasionally do investments in share market. I have a housing loan for Rs.25 lakhs, which my husband clears. I also had a personal loan for 3 lakhs . Recently I sold my site for Rs.1683600.00 I cleared personal loan 3 lakhs and partially cleared housing loan to the extent of 948259.00. I utilized Rs.1252069 out of 1683600.00 towards clearing loans . Kindly inform me whether the balance amount 4.3. lakhs will attract income tax. Should I use the entire amount to clear the loan. Can I retain some amount. Kindly clarify.
Asked 7 years ago in Income Tax
The site was purchased in March 2005 for 96,000.00 and sold in September 2017 for Rs.1683600.00. I sold the site to clear my loans. I am left with Rs.4.3 lakhs from this sale. Can I retain some amount (upro 2.5 lakhs) or should I necessarily clear the housing loan. Also, I was told if the sale of property is to clear the housing loan, then it will not attract income tax. Please clarify.
Asked 7 years ago
Hii
Your indexed cost of Acquisition is = 96000/113*272 = 231080
Your sales price is = 1683600
thus your capital gain is = 1452520
Tax applicable on above gain is = 1452520*20% = 290504
for tax saving you have to invest above gain subject to section 54/54F
Section 54
Old Asset Residential Property New Asset Residential Property or invest in specified bonds, amount of capital gain you invest is exempt from tax subject to some conditions
Section 54F
Old Asset Any Asset New Asset Residential Property or invest in specified bonds, amount of Consideration you invest is exempt from tax subject to some conditions.
My specific question is when I use the amount gained from the sale of site to clear the housing the loan, I am informed by the bank that it is not taxable. Kindly confirm this point alone.
Asked 7 years ago
My specific question is not answered. I am not happy with the answers so far provided to me.
Asked 7 years ago
In you case, even if you clear the housing loan, still the capital gain amount will be taxable in your hands.
For getting tax rebate, the house for which you are clearing the loan should have been purchase within 1 year from the date of sale.
Hello,
What do you mean by the term site here ?
Is it a website, is it an advertising site, is it a piece of land ?
And for your exemption part, no matter whatsoever part of money you have used to clear your outstanding bank loan debt, it will not help you claim exemption against taxes.
Even though you pay off the entire home loan, it will not at all help you save taxes.
I request you to please clarify your question on a more precise note to help answer your question better.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
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