How to save Capital Gains Tax on Sale of Land / House Property?
Capital assettypically refers to anything that you own for personal or investment purposes. It includes all kinds of property; movable or immovable, tangible or intangible, fixed or circulating.
Examples include a house, land, household furnishings, stocks, bonds or mutual funds held as investments etc.,
When you sell a capital asset, the difference between the purchase price of the asset and the amount you sell it for is a capital gain or a capital loss. Capital gains and losses are classified as long-term or short-term.
If Land or house property is held for 36 months or less24 months or less(w.e.f. FY 2017-18)then that Asset is treated as Short Term Capital Asset. You as an investor will make either Short Term Capital Gain (STCG) or Short Term Capital Loss (STCL)on that investment.
If Land or house property is held for more than 36 monthsmore than 24 months(w.e.f FY 2017-18 / AY 2018-19) then that Asset is treated as Long Term Capital Asset. You will make either Long Term Capital Gain (LTCG) or Long Term Capital Loss (LTCL) on that investment.
You may have to pay Capital Gains Tax on STCG / LTCG.
In this post let us understand – How to calculate Short Term capital gains on sale of land or property? How to calculate Long Term Capital Gains on sale of land or house? What are the applicable capital gain tax rates on sale of land / house property? How to avoid / save / minimize capital gains tax on sale of land or flat?
How to calculate Capital Gains on sale of Land or House property?
Short Term Capital Gains Calculation is calculated as below:
STCG = Total Sale Price – Cost of acquisition – expenses directly related to sale – cost of improvements.
Long Term Capital Gains Calculation;
The LTCG calculation is similar to STCG. The only differences are, you are allowed to deduct Indexed Cost of Acquisition/Indexed Cost of Improvements from the sale price and also claim certain exemptions to save capital gains tax.
With effective from Financial Year 2017-18, the base year for calculation of Indexation is going to be 2001.
(Indexation is done by applying CII – cost inflation index. This increases your cost base ie purchase price and lowers your gains. Your purchase price is adjusted for the impact of inflation.
How do you calculate the indexed cost of purchase? The indexed cost is calculated with the help of a table of cost inflation index.
Divide the cost at which you purchased the Property by the index as on the date of the purchase. Multiply this by the index as on the date of sale.
For Example : If purchase year is 2011 and year of sale is in Financial Year 2015. Then indexed cost of purchase would be –
Below is the Cost Inflation Index Table from 2001-02 to FY 2020-21 for your reference. Cost Inflation Index (CII) for FY 2020-21/ AY 2021-22 Notified by CBDT at 280.
What are the applicable Capital Gains Tax Rates on Sale of Property AY 2021-22?
Short Term Capital Gains are included in your taxable income and taxed at applicable income tax slab rates.
Long Term Capital Gains are taxed at 20%.
How do I save Capital Gains Tax from sale of Property?
Capital gains tax on Short term gains is unavoidable and no exemptions are available to minimize your tax liability. However, you can claim deductions to lower the tax liability on long-term gains.
How to save Capital Gains Tax by claiming Exemption u/s Section 54EC? (Applicable to LTCG only, on sale of both land / house property / commercial property)
Capital gains from sale of any long-term asset can be claimed as tax-exempt under Section 54EC of the Income-Tax Act by investing in notified bonds within six months of the transfer of Asset.
These bonds are issued by the Rural Electrification Corporation and the National Highways Authority of India.
The exemption is equal to the investment or the capital gain, whichever is lower. If you transfer or take a loan against these bonds within three years, the capital gain will become taxable.
These are redeemable after 3 years and must not be sold before the lapse of 3 years from the date of sale of the house property. The Bonds issued u/s 54EC for saving of LTCG on sale of property will now have a lock-in period of 5 years instead of 3 years from FY 2018-19.
You are allowed a period of 6 months to invest in these bonds, but before the Income Tax Return filing date (to claim this exemption).
You can invest a maximum of Rs 50 lakhduring a financial year in these bonds as per Budget 2015-16.
How to save Capital Gains Tax by claiming Exemption u/s Section 54? (Applicable to LTCG on sale of house property only)
You can use the entire Long Term Capital Gain proceeds on sale of a residential house to buy another house property (residential property) to save Capital Gains tax. Below conditions need to be satisfied though;
The new house has to be bought one year before(under-construction property) the transfer of the first house or within two years after the sale. (For an Under construction property or flat , the construction has to be completed within three years of the transfer of the first property.)
The deduction allowed is equal to the actual investment or the capital gain, whichever is lower.
If you plan to use the gain to build a house, it has to be done within three years of the sale of the property. Do note that ‘cost of land’ can be included in the construction cost.
How to save Capital Gains Tax u/s 54F?(Conditions applicable to LTCG on sale of Land or Commercial Property)
Below conditions need to be satisfied in case you sell land and are planning to buy a residential home.
You can use the entire sale proceeds (received by selling a plot / land) to buy a new house or to build a new residential house.
If you use a part of the money, the deduction will be proportion of the invested amount to the sale price.
The time-frame for investment is the same as that for capital gains from residential property.
You should not own more than one residential house prior to this investment.
The deducted capital gain (from sale of land) becomes taxable if you buy another house (other than the new one) within two years of the transfer of the original asset or construct a new one within three years.
If the new house is sold within three years, the deduction claimed will become taxable as a long-term gain.
This new house purchased or constructed must be situated in India.
The proceeds should not be invested in a commercial propertyor in another vacant plot.
How to Save Long Term Capital Gains Tax without buying another House Property?
If you are unable to invest the sale proceeds in any of the above options before the date of income tax returns filing , you can deposit the CAPITAL GAINS (not entire sale proceeds) amount in a public sector bank or other banks as per the Capital Gains Account Scheme- CGAS, 1988.
The capital gain (full amount or utilized amount)can be deposited in CGAS account.
This is only a stop-gap arrangement, as the funds have to be used to buy or build a house within the period specified.
The deposited money can be used only to buy or construct a residential house within the prescribed time frame.
If you withdraw funds from this account, they have to be used within 60 days.
If you do not utilize the amount within three years of the sale of the first property, such un-utilized amount will be treated as LTCG this will lead to taxation of the unutilized amount as long-term capital gain after three years of the sale of the first / original property.
The interest rates paid on these accounts are the same as those on regular savings and term deposits. Kindly note that interest earned on this account is taxable.
How to Save Long Term Capital Gains Tax under New Section 54GB(5)?
Under Section 54GB(5) of the Income Tax Act, 1961, long term capital gains on the sale of residential property will be exempt if the sale proceeds are invested in a eligible startup, provided such transfer took place prior to March 31, 2019. As per the latest full Budget 2019-20, this has now been extended to March 2021.
Important points on Capital Gains Tax & Sale of Land / Home
Agricultural land in a rural area in India it is not considered a Capital Asset, and therefore no capital gains are applicable on its sale.
While calculating capital gains, expenses related to transfer / sale like advertisement expenses, brokerage expense, Stamp duty, Sale deed registration fees, Legal (lawyer) expenses etc., can be deducted from the Purchase price.
Sale of a property that is inherited or accepted as a gift will also attract capital gain/loss provisions even though you haven’t spent any money to acquire it. In such a case, capital gains will be computed on the basis of the cost to the previous owner, indexed to the year of purchase.
If the cost of the new residential property is lower than the total sale amount, then the exemption is allowed proportionately.
The new property must only be bought on the name of the seller and not on anybody else’s name. Joint ownership can be acceptable but exemption can be limited to the share of ownership.
You must also remember that you are allowed to purchase or construct only one new asset from the capital gain that accrues. This means that you cannot make multiple property acquisitionsand thus seek to reduce your tax outgo. However, if you sell more than one property, you can invest the resulting cumulative capital gain amount in a single new property.
If you use the capital gain amount to clear loansthen tax on LTCG cannot be saved. No exemptions can be claimed.
Capital Gain Tax cannot be saved if the sale proceeds are invested in a commercial property, agricultural land or plot.
According to the latest amendments in the Income Tax Act, the residential property which is bought by re-investing the long-term capital gains must be situated in India.If you would like to buy a property outside India say in the US, you need to pay tax on the capital gain portion of the sale proceeds.
Categorize your capital gains i.e., Short term or Long term.
Calculate Short Term Capital Gains (STCG) / Long Term Capital Gains (LTCG).
If you have STCG, taxes are payable as per your income tax slab rate.
If you have LTCG, to save capital gains tax ;
You may invest the gains in another Residential property (or)
Buy Notified Bonds (or)
Temporarily invest in Capital Gains Account Schemes.
Else, you have to pay 20% on your Long Term Capital Gains.
Calculation of Capital Gains Tax on sale of property can be sometimes be a tricky one. It is advisable to exercise caution when claiming Capital Gains Tax Exemptions. When in doubt, kindly consult a tax expert or a Chartered Accountant.
(Image courtesy of Stuart Miles at FreeDigitalPhotos.net)
This post was last modified on September 28, 2023 6:32 pm
Sreekanth Reddy
Sreekanth is the Man behind ReLakhs.com. He is an Independent Certified Financial Planner (CFP), engaged in blogging & property consultancy for the last 14 years through his firm ReLakhs Financial Services . He is not associated with any Financial product / service provider. The main aim of his blog is to "help investors take informed financial decisions." "Please note that the views given in this Blog/Comments Section/Forum are clarifications meant for reference and guidance of the readers to explore further on the topics/queries raised and take informed decisions. The information provided, therefore, should not be viewed as financial, legal, accounting, tax or investment advice."
Can we get deduction of stamp duty paid at the time of sale (if same has been mentioned in agreement that stamp duty to be borne by seller), while calculating short term capital gain?
Dear Gopal..Are you referring to Section 80C deduction?? If so, I don't think a seller can claim the tax deduction.
Dear Sreekanth,
Thanks very much for this informative article. I am sure it is helping out a lot of bewildered people out there.
I wonder if you would kindly provide me some advice. I had land that was purchased in 1989. It was sold about one year ago in March 2015. I wish I had read your article then. My agent told me there would be no tax since it is long term capital gains. I live abroad. In August 2015 a letter was delivered to my home address in India from the IT department asking me to respond within 7 days regarding capital gains. My agent told me after consulting a chartered accountant that it can be taken care of when I visit India. From your article it is now clear that 20% of capital gains will be incurred as tax, which is a substantial amount. My questions are as follows:
1. On the sale deed the property is noted as a vacant land. It is a residential plot. Since it was owned for about 15 years, can expenses related to the property (even if it was finally sold as vacant land) be deducted after indexation to reduce capital gains tax? I am referring to expenses such as boundary wall construction (which over the years got damaged, had to be repaired, etc.), foundation construction (upon which nothing got built), property maintenance (clearing, etc.), employing somebody to secure and guard the property. Any other expenses that you can think of that are normally incurred over the course of 10-15 years to improve/maintain a residential plot that can be deducted for capital gains tax reduction?
2. Another complication is that due to delay in tax payment, I have to now pay 1% per month interest on tax owed. What can I do to avoid that? Will there be penalty provisions invoked because of delay in responding to the letter from the IT department? Will a copy of my foreign passport be sufficient to justify and excuse me from these provisions (interest and penalty). Can you please elaborate on what I may be facing here and what I can do about it?
I would appreciate your responding to my questions as soon as you can and providing me any helpful advice in reducing my capital gains tax.
Thanks,
Akshay
Dear Akshay,
Below expenses can be deducted from the sale price;
* Brokerage or commission paid for securing a purchaser
* Cost of stamp papers
* Travelling expenses in connection with transfer - these may be incurred after the transfer has been affected.
I am not sure if 'construction of compound walls etc' can be considered as 'cost of improvement'. Kindly go through this judgement which can be relevant to your case.Click here..
Suggest you to get in touch with CA directly and sort this out. Kindly clear your tax dues (if any) at the earliest and do not postpone the matter further.
Dear Sreekanth,
Thanks for sharing your valuable knowledge on this forum. I have a question on the capital gains tax applicability in case of joint ownership with wife. My wife is a home maker and the flat is in our joint ownership (Her contribution was her parent's gift at marriage and I paid the remaining amount using a loan).
Now can the capital gains be shared between us? If 10,00,000 is the long term capital gains after indexation, will I be able to show 500000 as my capital gains and 500000 as my wife's gains?
Thanks in advance for your response
Dear Ravi,
Yes, co-owner is separately assessed on his or her share of capital gains.
A followup question is: what can be claimed as " cost of improvement"? Is it wood work, periodic maintenance? What kind of supporting documents are needed for this claim?
Regards,
Ravi
Dear Ravi,
Wood work and all will not be considered as 'cost of improvement'.
Kindly go through this example;
Cost of improvement, as the name suggest, does n't mean normal repairs.
Suppose one has purchased a house constructed upto Ground floor only on 1.12.2007 for Rs 500000. Price paid- will be cost of acquisition. Now, the sidewalls which were of 5 feet hieght only, raised to 7 feet till 31.3.2008. Expenditure incurred 30000. It is the improvement cost.
After sometime, according to plan ans permission , he slowly starts to constructs First Floor. Upto 31.3.2010 he incurs expenditure of Rs 40500/-. From 1.4.2010 to 28.06.2010 the work has been completed and further Rs. 80500/ has been spent. These costs will be added to the cost of the property as cost of improvement.
As on 1.03.2011 , suppose this entire house is sold. Indexation will be made in respect of Cost of acquisition as Cost of Improvement in the following manner , so as to arrive Total Indexed Cost of the property-
1. INDEXED COST OF ACQUISITION =(500000 x CIF 2010-11)/CIF 2007-08
2. INDEXED COST OF IMPROVEMENT =(30000 x CIF 2010-11)/CIF 2007-08+ (40500x CIF 2010-11)/CIF 2009-10+(80500 x CIF 2010-11)/CIF 2010-11.
3. TOTAL INDEXED COST =1+2
Hi Sreekanth,
Very informative article.
I sold my flat and wish to know the exact amount of LTCG. below are the details of transactions:
Flat purchased : March 2009
Purchased price : 25L (basic: 22,43,125, stamp duty & reg. 1.,25,000, parking 75000 and mseb & soc. 65000)
Flat sold : Feb 2016.
Selling price : 54L
Can you please help me to confirm what will be the exact LTCG in these transaction?
Awaiting for your reply.
Thanks,
Deepa
Dear Deepa..Suggest you to use this LTCG calculator..kindly visit this link..
Also, I want to invest LTCG in new flat in this year. Can this LTCG is used for stamp duty and registration for new flat and remaining amount in basic price of new flat?
eg. if my LTCG is 10L. If new flat stamp duty and reg. is 3L , can i invest this LTCG against this stamp duty and remaining 7L to downpayment for new flat to save LTCG tax?
Dear Deepa,
I believe that as stamp duty & registration costs are included in the acquisition cost, you can use the LTCG proceeds for the same and save on taxes.
Hello sir, I had purchased flat worth RS. 20 lacs in August 2014 and took loan of RS. 17.45 lacs. Flat is in joint name with my father. I had purchased another flat worth RS. 19.90 lacs in March, 2016 and took loan of RS. 18 lacs. Flat is in joint name with my wife. Now how should I disclose my both loan in my it return? What is the best way to show off in itr?
Dear Sir,
I have purchased a flat in 2005 in Rs. 4.60 lakh and sold it in January 2016 at Rs. 7 lakhs. The Index cost of purchase is 4,60,000 * 1081/497 = 9,99,598.00. Thus, I have sold it in lesser value than the index cost of purchase. I would like to know the following:
1. Should I have to show this income in ITR
2. Should I have to reinvest the amount Rs. 7 lakhs
3. If I have to reinvest, what is the last date to reinvest it.
4. What are the options available with me to save tax in case it is necessary to show it in ITR
PLEASE REPLY. anxiously waiting Sir
Dear Ranjeet,
1 - Yes, you can show this under section CFL schedule (carried forward losses).
2 - No.
4 - You can SET-OFF these capital losses with the capital gains (if any) under the same head (income from property) or with capital gains earned under any other HEAD.
Else, you can also carried forward these losses for next 8 years and can set-off against same head profits in the future.
Hi Sreekanth,
I bought the panchayat approved plot in 2000 and was registered like agriculture land (Means mentioned as plot but registration rate is agriculture land and Not in square yards) after that i have sold that plot in 2013 (square yards). The plot is located in panchayat area and it will also come into UDA jurisdiction it was not regularized by UDA and the plot do not have 30 feet roads and no common public place allotted. Please let me know weather this can be treated as plot or agricultural land and will attract to capital gain?
We sold a 9 Marla plot in a village in India in July 2015 for Rs. 450000, but sale deed will be done in April 2016. I have one third share in that sale proceed; we being 3 brothers. Where shall I mention my share Rs. 150000 in the IT return. The plot came in our name in March 2014 after demise of father. I do not know its purchase value and date of purchase. Whether should I pay tax on 150000 or not as the sale deed has not been done, and if yes, how much.
Dear Gurmit,
There is no need to mention the sale amount (your share) in ITR. You have to calculate & show 'capital gains' and pay taxes (STCG taxes if any, in your case).
Suggest you to take help of a CA.
Dear Jagadeesh..Can't advise on this without actually looking into the documents and also without knowing about the location. Suggest you to take help of a local legal expert.
Dear Sir,
Greetings.
I bought a residential property on oct 2014 ,I would like to sell it on april 2016.One of my friend who is a CA has advised me to invest in the capital gains account in sbi .other friend who is also ca has advised me that there are no STCG Exemptions i cant go for the sbi capital gains account.please advise if i could go for the sbi capital gains account by selling the property for a stipulated period.
Dear SHEKHAR..Yes, no exemptions are available on STCG.
Capital gains tax on Short term gains is unavoidable and no exemptions are available to minimize your tax liability.
Dear Sir,
If a person sale its residential house and invest the sale proceed in construction of commercial building. Will he be able to receive any exemption in Capital Gain?
Dear Shiva..I believe that investing in a residential property is allowed for CG exemptions and not in a commercial building.
Hello sir,
My Question is I sold a property in delhi and after few day i bought a flat and some furniture item like( sofa, table etc.)
So question is will that cost of sofa and table will be considered as a part of flat cost.
Thanks
Dear sanjay,
I believe that purchase of furniture etc can not be considered as a capital asset and not included while computing 'capital gains'.
View Comments
Dear Reddy Sir,
Can we get deduction of stamp duty paid at the time of sale (if same has been mentioned in agreement that stamp duty to be borne by seller), while calculating short term capital gain?
Dear Gopal..Are you referring to Section 80C deduction?? If so, I don't think a seller can claim the tax deduction.
Dear Sreekanth,
Thanks very much for this informative article. I am sure it is helping out a lot of bewildered people out there.
I wonder if you would kindly provide me some advice. I had land that was purchased in 1989. It was sold about one year ago in March 2015. I wish I had read your article then. My agent told me there would be no tax since it is long term capital gains. I live abroad. In August 2015 a letter was delivered to my home address in India from the IT department asking me to respond within 7 days regarding capital gains. My agent told me after consulting a chartered accountant that it can be taken care of when I visit India. From your article it is now clear that 20% of capital gains will be incurred as tax, which is a substantial amount. My questions are as follows:
1. On the sale deed the property is noted as a vacant land. It is a residential plot. Since it was owned for about 15 years, can expenses related to the property (even if it was finally sold as vacant land) be deducted after indexation to reduce capital gains tax? I am referring to expenses such as boundary wall construction (which over the years got damaged, had to be repaired, etc.), foundation construction (upon which nothing got built), property maintenance (clearing, etc.), employing somebody to secure and guard the property. Any other expenses that you can think of that are normally incurred over the course of 10-15 years to improve/maintain a residential plot that can be deducted for capital gains tax reduction?
2. Another complication is that due to delay in tax payment, I have to now pay 1% per month interest on tax owed. What can I do to avoid that? Will there be penalty provisions invoked because of delay in responding to the letter from the IT department? Will a copy of my foreign passport be sufficient to justify and excuse me from these provisions (interest and penalty). Can you please elaborate on what I may be facing here and what I can do about it?
I would appreciate your responding to my questions as soon as you can and providing me any helpful advice in reducing my capital gains tax.
Thanks,
Akshay
Dear Akshay,
Below expenses can be deducted from the sale price;
* Brokerage or commission paid for securing a purchaser
* Cost of stamp papers
* Travelling expenses in connection with transfer - these may be incurred after the transfer has been affected.
I am not sure if 'construction of compound walls etc' can be considered as 'cost of improvement'. Kindly go through this judgement which can be relevant to your case.Click here..
Suggest you to get in touch with CA directly and sort this out. Kindly clear your tax dues (if any) at the earliest and do not postpone the matter further.
Dear Sreekanth,
Thanks for sharing your valuable knowledge on this forum. I have a question on the capital gains tax applicability in case of joint ownership with wife. My wife is a home maker and the flat is in our joint ownership (Her contribution was her parent's gift at marriage and I paid the remaining amount using a loan).
Now can the capital gains be shared between us? If 10,00,000 is the long term capital gains after indexation, will I be able to show 500000 as my capital gains and 500000 as my wife's gains?
Thanks in advance for your response
Dear Ravi,
Yes, co-owner is separately assessed on his or her share of capital gains.
A followup question is: what can be claimed as " cost of improvement"? Is it wood work, periodic maintenance? What kind of supporting documents are needed for this claim?
Regards,
Ravi
Dear Ravi,
Wood work and all will not be considered as 'cost of improvement'.
Kindly go through this example;
Cost of improvement, as the name suggest, does n't mean normal repairs.
Suppose one has purchased a house constructed upto Ground floor only on 1.12.2007 for Rs 500000. Price paid- will be cost of acquisition. Now, the sidewalls which were of 5 feet hieght only, raised to 7 feet till 31.3.2008. Expenditure incurred 30000. It is the improvement cost.
After sometime, according to plan ans permission , he slowly starts to constructs First Floor. Upto 31.3.2010 he incurs expenditure of Rs 40500/-. From 1.4.2010 to 28.06.2010 the work has been completed and further Rs. 80500/ has been spent. These costs will be added to the cost of the property as cost of improvement.
As on 1.03.2011 , suppose this entire house is sold. Indexation will be made in respect of Cost of acquisition as Cost of Improvement in the following manner , so as to arrive Total Indexed Cost of the property-
1. INDEXED COST OF ACQUISITION =(500000 x CIF 2010-11)/CIF 2007-08
2. INDEXED COST OF IMPROVEMENT =(30000 x CIF 2010-11)/CIF 2007-08+ (40500x CIF 2010-11)/CIF 2009-10+(80500 x CIF 2010-11)/CIF 2010-11.
3. TOTAL INDEXED COST =1+2
Hi Sreekanth,
Very informative article.
I sold my flat and wish to know the exact amount of LTCG. below are the details of transactions:
Flat purchased : March 2009
Purchased price : 25L (basic: 22,43,125, stamp duty & reg. 1.,25,000, parking 75000 and mseb & soc. 65000)
Flat sold : Feb 2016.
Selling price : 54L
Can you please help me to confirm what will be the exact LTCG in these transaction?
Awaiting for your reply.
Thanks,
Deepa
Dear Deepa..Suggest you to use this LTCG calculator..kindly visit this link..
Also, I want to invest LTCG in new flat in this year. Can this LTCG is used for stamp duty and registration for new flat and remaining amount in basic price of new flat?
eg. if my LTCG is 10L. If new flat stamp duty and reg. is 3L , can i invest this LTCG against this stamp duty and remaining 7L to downpayment for new flat to save LTCG tax?
Dear Deepa,
I believe that as stamp duty & registration costs are included in the acquisition cost, you can use the LTCG proceeds for the same and save on taxes.
Hello sir, I had purchased flat worth RS. 20 lacs in August 2014 and took loan of RS. 17.45 lacs. Flat is in joint name with my father. I had purchased another flat worth RS. 19.90 lacs in March, 2016 and took loan of RS. 18 lacs. Flat is in joint name with my wife. Now how should I disclose my both loan in my it return? What is the best way to show off in itr?
Dear Ashvin,
May I know which one is Selfoccupied/let-out? Is your spouse/father earning members of your family?
Read:
Income From house property & Home loan benefits.
Self-occupied property & Tax implications.
Joint home loan & Tax benefits.
Dear Sir,
I have purchased a flat in 2005 in Rs. 4.60 lakh and sold it in January 2016 at Rs. 7 lakhs. The Index cost of purchase is 4,60,000 * 1081/497 = 9,99,598.00. Thus, I have sold it in lesser value than the index cost of purchase. I would like to know the following:
1. Should I have to show this income in ITR
2. Should I have to reinvest the amount Rs. 7 lakhs
3. If I have to reinvest, what is the last date to reinvest it.
4. What are the options available with me to save tax in case it is necessary to show it in ITR
PLEASE REPLY. anxiously waiting Sir
Dear Ranjeet,
1 - Yes, you can show this under section CFL schedule (carried forward losses).
2 - No.
4 - You can SET-OFF these capital losses with the capital gains (if any) under the same head (income from property) or with capital gains earned under any other HEAD.
Else, you can also carried forward these losses for next 8 years and can set-off against same head profits in the future.
Hi Sreekanth,
I bought the panchayat approved plot in 2000 and was registered like agriculture land (Means mentioned as plot but registration rate is agriculture land and Not in square yards) after that i have sold that plot in 2013 (square yards). The plot is located in panchayat area and it will also come into UDA jurisdiction it was not regularized by UDA and the plot do not have 30 feet roads and no common public place allotted. Please let me know weather this can be treated as plot or agricultural land and will attract to capital gain?
We sold a 9 Marla plot in a village in India in July 2015 for Rs. 450000, but sale deed will be done in April 2016. I have one third share in that sale proceed; we being 3 brothers. Where shall I mention my share Rs. 150000 in the IT return. The plot came in our name in March 2014 after demise of father. I do not know its purchase value and date of purchase. Whether should I pay tax on 150000 or not as the sale deed has not been done, and if yes, how much.
Dear Gurmit,
There is no need to mention the sale amount (your share) in ITR. You have to calculate & show 'capital gains' and pay taxes (STCG taxes if any, in your case).
Suggest you to take help of a CA.
Dear Jagadeesh..Can't advise on this without actually looking into the documents and also without knowing about the location. Suggest you to take help of a local legal expert.
Dear Sir,
Greetings.
I bought a residential property on oct 2014 ,I would like to sell it on april 2016.One of my friend who is a CA has advised me to invest in the capital gains account in sbi .other friend who is also ca has advised me that there are no STCG Exemptions i cant go for the sbi capital gains account.please advise if i could go for the sbi capital gains account by selling the property for a stipulated period.
Dear SHEKHAR..Yes, no exemptions are available on STCG.
Capital gains tax on Short term gains is unavoidable and no exemptions are available to minimize your tax liability.
Dear Sir,
If a person sale its residential house and invest the sale proceed in construction of commercial building. Will he be able to receive any exemption in Capital Gain?
Dear Shiva..I believe that investing in a residential property is allowed for CG exemptions and not in a commercial building.
Hello sir,
My Question is I sold a property in delhi and after few day i bought a flat and some furniture item like( sofa, table etc.)
So question is will that cost of sofa and table will be considered as a part of flat cost.
Thanks
Dear sanjay,
I believe that purchase of furniture etc can not be considered as a capital asset and not included while computing 'capital gains'.