February 24, 2012 10:22 am
Gold sold after 5 years fetched 10 lakhs profit.please tell me the tax on it.
Also,is there a way to avoid or reduce this tax?
thanks so much Ashal..
Dear Aseefth, here is the calculation.
Purchase Financial year = 2006-2007.
Cost inflation index of FY 2006-2007 = 519
Purchase price = 600000
Sell FY = 2011-2012
Cost inflation Index of of FY 2011-2012 = 785
Indexed purchase price = 600000*785/519 = 907514
Sell Price = 1500000
So Long Term capital Gain (with Indexation) = 1500000 – 907514 = 592486
Tax on indexed LTCG @20.6% = 1.22L Rs.
If you opt to do not using benefit of indexation, The Tax @ 10.3% on basic Gain amount of 9L Rs. = 92700 Rs.
Since from the 2 above, non indexed gains are better tax adjusted ones, you may use the same.
For tax saving purpose, please read my previous reply.
gold purchased for 6 lac approx. dec 2006.
Sold for 15lac on feb 2012.
If this full profit amount is invested in buying land property,will i get 100% tax deduction ?
Dear Aseef, Please provide the following details.
1. Actual Year of purchase with month if possible.
2. Purchase price & quantity
3. Sell date
The gains are Long Term Capital Gains & thus you have the option to pay Tax either @ 10.3% with out indexation or 20.6% with indexation, which ever is favorable to you. For calculation of indexed gains, I required the details as I asked for.
Regarding to save on Tax, you have following options –
1. Invest the Indexed Gain amount in Capital Gain saving bonds of NHAI & REC under section 54EC.
2. Invest in a residential property to save on LTCG Tax under section 54F.
3. if you do have some STCL as well as LTCL from sell of other capital assets, you may adjust the same.
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