Query on capital gain for selling property

POSTED BY Md Raffi ON November 14, 2012 6:08 pm COMMENTS (6)


I bought a residential plot for 2.5 lakhs in 2005 and constructed house on 2007. For house construction I took Home loan for 13 lakhs and paying the EMI of 15K for the same till now. Now decided to foreclose the loan and sell the house for around 35 lakhs. I dont have plan to reinvest the amount in constructing another house.

1. How much will be the capital gain and income tax for the same?

2. Will the money invested for house construction will be deducted from capital gain?

3. What are the ways to avoid income tax for the same?




6 replies on this article “Query on capital gain for selling property”

  1. Dear Rafi, please do the actual calculations. if you are spending at least upto Gain amount or more than that, then only you can claim.



  2. Md Raffi says:


    Thanks for the clarification. I am planning to construct house in my another vacant plot.
    Hope this will eliminate my capital gain.


  3. Dear Rafi, yes, the basic amount spent by you to wards construction ‘ll also be considered for calculation of LTCG.



  4. Md Raffi says:

    Thanks a lot for the clarifications. My main concern is whether the amount invested for construction(Loan amount) will be deducted while calculating the capital gain.

  5. There are NHAI and REC bonds where you can invest your money to save tax !

  6. Biswa Singh says:

    1. To know the capital gain please consult a authorised valuer who will do the inflation adjustment and tell you the actual capital gain. The income tax on long term capital gain is 20%.

    2. Best suggestion will be given by the authorised valuer who wil do the inflation adjustment on the actual money invested in buying the land and construction cost.

    3. You can reinvest the money in a residential property to save the capital gain tax or you can invest the money in capital gains tax saving bonds or Capital Gain Account Scheme (saving or term deposit)

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