Tax implication on sold property

POSTED BY immanuel guru ON January 15, 2013 5:15 pm COMMENTS (12)

Hi,

 

In 2007 I bought a house for Rs. 490000 and renovated it with Rs.120000 I spent Rs.45000 for stamp duty and registration.

I took housing loan of 555000 for this and continued paying EMI.

 

 

Now I sold this house for Rs. 1965000 and used RS.457000 foreclose Housing loan.

 

What are the tax implication on this. Can I get tax exemption if I buy a house using the long term capital gain amount.

 

Please help me to understand and save tax

 

Regards

Immanuel

12 replies on this article “Tax implication on sold property”

  1. immanuel guru says:

    Hi Ashal,

    Thanks for the replay and suggestion.I will declare full amount I receveid.
    I invested 10 Lakh in residental plot. I will construct house in next 1.5 years.

    Once Again thanks for your qucik replay.

    Regards
    Immanuel

  2. Dear Immanuel, You mean to say, 19L was the agreed value & registered value is 17L Rs? Well My dear friend, what about the difference of this 2L Rs? Where is that money? Had you received it in cash as a black money transaction? if your answer is yes, please declare this money & calculate your LTCG on this 19L figure. We encourage honest tax paying & want you to do the same. there is more to it, if your case comes into scrutiny at all, you w’d feel the heat from IT people at that time for concealment of income.

    Thanks

    Ashal

  3. immanuel guru says:

    sorry… Please read it as * Property sale deed

  4. immanuel guru says:

    Hi Ashal,

    On agreement paper sale price is Rs.1965000/- for the property I sold. But property sale dead which is registered is for Rs.1755000/-.
    Which one should I consider as sale value for computing LTCG ?

    Regards
    Immanuel

  5. Dear Immanuel, what do you mean?

    Thanks

    Ashal

  6. immanuel guru says:

    Hi Ashal,

    Which value should be considered for LTCG tax calculation. 1.value shown in agreement document or the value shown in Registered absolute sale dead document.

    Regards
    Immanuel

  7. immanuel guru says:

    Hi Ashal,

    Thank you so much.

    Regards
    Immanuel

  8. immanuel guru says:

    Hi Ashal,

    Thanks for the quick response. You put it very simple and clear.
    Just one clarification required. If I buy a residential site with this LTCG does this qualify for tax saving ?. andin how many months I should invest this amount in property ?

    Where i will get Cost inflation index for reference.

    Thanks in Advance

    Regards
    Immanuel

    1. Dear Immanuel, do you want to invest in a plot to save LTCG tax liability. The plain answer is no. You w’d have to construct a house on it within the 3Y from the sell date of old property. Here 3Y means, the construction should be over & possession of the house should be with you.

      Thanks

      Ashal

  9. Dear Immanuel, the purchase FY applicable to you is 2007-2008. So here goes the calculation.

    A. Purchase FY = 2007-2008
    B. Purchase year Cost inflation index = 551
    C. Purchase cost = 660000
    D. Sell FY = 2012-2013
    E. Sell Year CII = 852
    F. Indexed purchase price = 660000*852/551 = 1020544
    G. Sell Price = 1965000
    H. Long Term Capital Gains = G – F = 944456

    Now you can save Tax on this 9.44L Rs. amount either by investing in Capital Gain saving bonds or by purchasing another residential property.

    Thanks

    Ashal

  10. immanuel guru says:

    Hi Ashal,

    Exact date of purchase is 15-Oct-2007 and sold on 11-Jan-2013

    Regards
    Immanuel

  11. Dear Immanuel, What’s the exact date of purchase of your house?

    thanks

    Ashal

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