INCOME TAX – CAPITAL GAIN TAX

POSTED BY HARI ON July 21, 2012 3:23 pm ONE COMMENT

I am senior citizen and I have sold my flat on 01.07.2012 :
Cost price in 1988 = Rs. 1,70,000
Sold price in 2012 = Rs. 23,00,000
Calculation : 1988-89 index was 161 , 2011-12 index was 785
So the notional cost price paid = 1,70,000*(785/161) = Rs. 8,28,881 say Rs. 8,28,000
Since property is held for long term : Long term profit = Rs. 23,00,000 minus 8,28,000 = Rs. 14,72,000
Tax to be paid = 20% of = Rs. 14,72,000 would be Rs. 2,94,400

My Question : 1. Calculation is ok
2. Can I purchase new flat only for Rs. 14,72,000 and avail tax benefit or I have to purchase flat worth of Rs. 23,00,000
3. Is it neseccery open CGAS within 3 months of sale or I can open it within 31.03.12 (Retun dt)
4. I have put Rs. 8,00,000 in term deposit in bank on 15.06.2012 from Banakhat amount, whether I have to withdraw this amount and put in CGAS immediately
5. Whether I have to deposit advance tax worth of Rs. 2,94,400 within 3 month
Pls. give me your feedback. Thanks

One reply on this article “INCOME TAX – CAPITAL GAIN TAX”

  1. Prasad Kulkarni says:

    Dear Mr. Hari,

    I will try to explain the things as per my understnading.
    Since you have sold the flat on 01-July-12, FY2012-13 CII would be applicable for this. I guess it is still to be released (I could not find it on the internet).
    1. Replace 785 in your calculations with the current CII, your calculations will be correct.
    2. You can purchase new property which costs anything more than the LTCG (14,72,000) to avail tax benefit.
    3. I am not very sure of this answer, but what I know is that you will have to settle (Open the CGAS) this till 31-Aug-2012.
    4. No you won’t have to withdraw this amount. You will just have to put LTCG (14,72,000) into CGAS.
    5. Again not very sure of this, if you open the CGAS before 31-Aug-12, then you will not have to pay any tax.

    Other experts on JI Forum please correct me if I am wrong anywhere.

    Mr. Hari, I hope this helps you. Thanks.

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