Short term capital gains applicability if I sell my house in 1 yr itself

POSTED BY 24adithya ON July 24, 2014 9:26 am COMMENTS (3)

Hi,

I purchased a property in 29/6/2012 of agreement value 18,50,000 INR (which amounted to 20,50,000 INR after paying stamp duty and VAT and other taxes) and my EMI’s started from that month itself .

I sold the same property for 21,00,000 INR on 21/9/2013. During this period i paid EMI of around 1,50,000 INR (roughly).

With the money received, i cleared my home loan by paying back 17,00,000 INR and remaining money i invested back in another property i purchased in October 2013.

I wanted to know whether short term capital gains is applicable for this transaction, since, i re-invested my entire money within 6 months into another one ?

I am filing for income tax returns and i am confused how do i state down capital gain section. I am e-filing my tax returns from https://cleartax.in website.

P.S: I have claimed the principal + interest component of the earlier property under Section 80C and Section 24(b).

Please suggest.

Thanks,

Adithya

3 replies on this article “Short term capital gains applicability if I sell my house in 1 yr itself”

  1. 24adithya says:

    So, Capital gains will incur on 17,00,000 INR which will become the selling price ? and my indexed cost price will be 2259330.986 INR, so capital gains will be negative correct ? (-559330.9859 INR) ?

    As Manish had pointed out showing negative capital gains will help in managing profits if profit is made in some other fund (https://www.jagoinvestor.com/2009/05/how-to-calculate-capital-gains-and-what_7801.html); in my case though i haven’t anything to claim as profit, so will showing negative capital gains help in a way in future ?

    Thanks,
    Adithya

  2. 24adithya says:

    Thanks Credexpert!

  3. Credexpert says:

    Dear Adithya,

    Deduction under capital gains for house property is applicable only if you re-invest the entire sales proceeds in a new house property.
    Thus the amount you have used to re-pay your loan will be taxed. Only the amount re-invested in the new property will be deducted from capital gains.

    Regards,
    Credexpert

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