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."
My wife has sold a residential plot having capital gain in current year. Now the amount received has been kept in her saving account and planned to purchase another plot with construction of house on it. My query is that how the interest earned from saving account on this capital gain amount will be treated. whether it will be included in capital gain or in the income of my wife. purchasing will be done before filing returns for the current year ie FY 20-21. Also suggest any better option.
Thanks
Dear Hanuman,
The interest earned on 'Saving a/c deposit' falls under the head 'income from other sources' and added to her 'taxable income'.
Have you considered - Capital Gains Account Scheme- CGAS,??
thanks a lot. CAGS not considered till now, however if i choose this one then in that case how interest earned from saving account on this capital gain amount will be treated. whether it will be included in capital gain or in the income of my wife.
What is better option?
thanks i n advance
Dear Hanuman,
Its treated as 'income from other sources' and added as taxable income and taxed as per applicable tax slab rate.
Hi Sreekanth,
Thank you for sharing your blogs, very helpful for layman.
If you could kindly help me with the below query,
My father is considering construction of a new house after selling his existing property. The reinvestment will be for the full amount obtained in capital gains and will be used within three years (as mentioned in the article above) for buying plot, construction and interiors. Will all these types of reinvestments i.e. buying plot, construction and interiors, be tax exempt under LTGC?
Any leads would be helpful in this regard, thanks.
Dear Neeti,
Is existing property a vacant plot or constructed house?
thank you for getting back,
exisiting property is a constructed house.
Dear Neeti,
Yes, he can claim exemption u/s 54.
Suggest you/your father to keep all the bills for future reference.
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.
thanks for confirming that interiors can be covered, yes we will ensure we maintain bills for all purchases against interirors. And it is big relief to know that cost of land can be included in the construction cost, thanks alot, appreciate your quick responses.
Dear Neeti,
There are few court judgments, allowing interior work expenses.
"Admittedly, without interior work, largely kitchen, carpentry, ceiling and flooring the apartment cannot be come usable, thus, such investment was rightly held to be investment in the residential property,"
But, expenses towards 'Furniture' may not be included, as its not a capital asset.
Clarification required:-
I am planning to buy land and construct house using my capital gain amount.
1) Can I buy land from one party and house construction from another party (building contractor)?. Hope this allowed under Income Tax Act.
2) Can I utilize the capital gain amount to pay stamp duty, registration fee and cess for the land?
3) Can I utilize the capital gain amount to pay the cost of interior works (kitchen cabinets and wardrobes)?
Hi Shreekant,
My Father sold his house in September 2017 which he bought in 2002. Now, he is thinking to buy another to avoid LTCG.
We are somehow unable to figure out, how is the last day calculated for taking LTCG tax benefit.
It would be very helpful, if you could help me understand that. Also, I'm in delhi, if there is any reference for any CA in Delhi whom I can be in touch with to discuss this further in more detail.
Dear Tushar,
As the holding period of the property is more than 2 years, the gains are considered as LTCG.
But, you now cant take the tax exemption on LTCG as the time-limit got over (1 year backward).
I do not have any contact info of a CA who resides in Delhi.
Got it.
Many thanks for your response. It would be very helpful if you could share contact details fo CA who could help me out. Location is not a constraint as we can connect over call and discuss further details.
Regards,
Tushar
Dear Tushar,
I have emailed the details.
Dear Sri.Sreekanth Reddy,
Good Morning. I have 3 plots in Tamil Nadu purchased 10 to 13 yrs ago and I want to sell these and construct a house in my Wife,s Residential Plot in Bangalore.Am I eligeble to get Capital Gains Tax exemption?
Dear Krishnamoorthy,
Yes, you may do so, but, this can be subject to scrutiny and you may have to then justify your position/stand.
Kindly consult a CA.
Hi Sreekant,
Hope you are doing well. Need a clarification . In april 2016 i bought 2 bhk flat in noida extension .Paid 1 demand (10 percent) by my savings. In agreement possesion date was 31 aug 2018. for rest of payment i sold some property in jan 2017 and opened a capital gain account. Paid rest 9 demand from capital gain account. last demand paid in jan 2020. from jan 2017 to jan 2020 its already 3 years. builder sent possesion letter this month and they have deemed oc, they cant do registry because oc is required . They are saying it will take time and might go to june. Delay in possesion and registry . 3 years already gone. . now what to do , i am scared ..
Dear Sachin,
May I know your exact query plz??
I have two houses registered in my name jointly with my wife Can I own another house or flat from the proceeds of sale of my father's house
Dear krishna,
One can own many houses , there is no such restriction..
But, do watch out for tax implications!
Thanks a lot
Hi Sreekant,
Hope you are doing well. Need a clarification on my under-construction flat / property sale.
I had purchased a flat on Feb 2017 (and signed the sales agreement with the builder in Feb 2017 only). Then I sold this under-construction property in the month of Aug 2019 (after ~ 2.5 yrs).
Question is: profit earned by sell of this under-construction flat, qualifies under stcg OR ltcg tax?
And if it falls under the ltcg, can I save the ltcg tax by reinvesting into a new property?
Dear Sourav,
I am doing good, thank you!
The date of Agreement or date of allotment can be considered for calculation of capital gains. As it has crossed 2 years, can be considered as LTCG.
Yes, you can claim ltcg exemption (subject to eligibility criteria).
You may kindly consult a CA as well.
Dear Sreekanth Reddy,
I am selling the house property in my name and can the proceeds be utilized to construct house on the plot in the husbands name within the stipulated 2-3 years period. Also the cost of registration seems to be less than the indexed value of the house. In that case how the LTCG be calculated.
regards,
Rama Ammu
Dear Rama,
Theoretically, it looks ok, though the property (land) is not in your name.
This can be subject to scrutiny by the IT dept.
In some of the recent judgments, the Courts have declared that an Assessee can claim tax exemption u/s 54 / 54F, even if the proceeds /investments are made in Joint names (or) Properties owned by mother / Spouse..
Courts' View :
A residential house is not a personal effects but it is meant for residential purpose of the family. Therefore, the investment made by the assessee for purchase or construction of house even in the name of the mother /father/Spouse is eligible for deduction u/s 54F.
What do you mean by - "cost of registration seems to be less than the indexed value of the house..." Are you referring to Registered selling price of the house owned by you ?
yes. The registration value at the time of initial purchase by me including the registration charges was say around 17 lakh in June 2010 Now if I sell it in 2020 before March 2020 then the value after indexation comes to around 30 lakh but the buyer is saying he will get it registered for 25 lakh His CA has suggested him to take the depreciation value as the property is almost 9 years old. In this case how to claim the Tax exemption or if the person will deduct the 20% as LTCG tax how can I claim it back
regards,
Dear Rama,
If the Guidance value (Govt minimum registration amount) is Rs 25 lakh then you can show this transaction as Long Term Capital Loss.
My suggestion would be to find a buyer who accepts higher Registered value (if not 100%).
Whether penalty paid to NOIDA Authorities (Uttar Pradesh) on delayed registration is eligible for cost od Indexation?
Dear SIVARAMAKRISHNAN,
If the delay reason is from their side, i believe you can claim indexation benefit.
Do kindly cross-check with a CA as well.
Hi Sreekant,
I sold a residential property in June,2019, and planning to buy a residential property to get capital gain exemption under sec.54. Should I buy the property within same financial year i.e. 31st March,2020 or till what period I can buy property to get LTCG exemption.
Also is it compulsory to register sale of the property with in the time or registration of sale agreement with possession also accepted for LTCG exemption.
Thanks in advance,
Prasad
Dear Prasad,
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.)
View Comments
Hi sreekanth, Happy Independence Day.
My wife has sold a residential plot having capital gain in current year. Now the amount received has been kept in her saving account and planned to purchase another plot with construction of house on it. My query is that how the interest earned from saving account on this capital gain amount will be treated. whether it will be included in capital gain or in the income of my wife. purchasing will be done before filing returns for the current year ie FY 20-21. Also suggest any better option.
Thanks
Dear Hanuman,
The interest earned on 'Saving a/c deposit' falls under the head 'income from other sources' and added to her 'taxable income'.
Have you considered - Capital Gains Account Scheme- CGAS,??
thanks a lot. CAGS not considered till now, however if i choose this one then in that case how interest earned from saving account on this capital gain amount will be treated. whether it will be included in capital gain or in the income of my wife.
What is better option?
thanks i n advance
Dear Hanuman,
Its treated as 'income from other sources' and added as taxable income and taxed as per applicable tax slab rate.
Hi Sreekanth,
Thank you for sharing your blogs, very helpful for layman.
If you could kindly help me with the below query,
My father is considering construction of a new house after selling his existing property. The reinvestment will be for the full amount obtained in capital gains and will be used within three years (as mentioned in the article above) for buying plot, construction and interiors. Will all these types of reinvestments i.e. buying plot, construction and interiors, be tax exempt under LTGC?
Any leads would be helpful in this regard, thanks.
Dear Neeti,
Is existing property a vacant plot or constructed house?
thank you for getting back,
exisiting property is a constructed house.
Dear Neeti,
Yes, he can claim exemption u/s 54.
Suggest you/your father to keep all the bills for future reference.
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.
thanks for confirming that interiors can be covered, yes we will ensure we maintain bills for all purchases against interirors. And it is big relief to know that cost of land can be included in the construction cost, thanks alot, appreciate your quick responses.
Dear Neeti,
There are few court judgments, allowing interior work expenses.
"Admittedly, without interior work, largely kitchen, carpentry, ceiling and flooring the apartment cannot be come usable, thus, such investment was rightly held to be investment in the residential property,"
But, expenses towards 'Furniture' may not be included, as its not a capital asset.
Clarification required:-
I am planning to buy land and construct house using my capital gain amount.
1) Can I buy land from one party and house construction from another party (building contractor)?. Hope this allowed under Income Tax Act.
2) Can I utilize the capital gain amount to pay stamp duty, registration fee and cess for the land?
3) Can I utilize the capital gain amount to pay the cost of interior works (kitchen cabinets and wardrobes)?
Hi Shreekant,
My Father sold his house in September 2017 which he bought in 2002. Now, he is thinking to buy another to avoid LTCG.
We are somehow unable to figure out, how is the last day calculated for taking LTCG tax benefit.
It would be very helpful, if you could help me understand that. Also, I'm in delhi, if there is any reference for any CA in Delhi whom I can be in touch with to discuss this further in more detail.
Dear Tushar,
As the holding period of the property is more than 2 years, the gains are considered as LTCG.
But, you now cant take the tax exemption on LTCG as the time-limit got over (1 year backward).
I do not have any contact info of a CA who resides in Delhi.
Got it.
Many thanks for your response. It would be very helpful if you could share contact details fo CA who could help me out. Location is not a constraint as we can connect over call and discuss further details.
Regards,
Tushar
Dear Tushar,
I have emailed the details.
Dear Sri.Sreekanth Reddy,
Good Morning. I have 3 plots in Tamil Nadu purchased 10 to 13 yrs ago and I want to sell these and construct a house in my Wife,s Residential Plot in Bangalore.Am I eligeble to get Capital Gains Tax exemption?
Dear Krishnamoorthy,
Yes, you may do so, but, this can be subject to scrutiny and you may have to then justify your position/stand.
Kindly consult a CA.
Hi Sreekant,
Hope you are doing well. Need a clarification . In april 2016 i bought 2 bhk flat in noida extension .Paid 1 demand (10 percent) by my savings. In agreement possesion date was 31 aug 2018. for rest of payment i sold some property in jan 2017 and opened a capital gain account. Paid rest 9 demand from capital gain account. last demand paid in jan 2020. from jan 2017 to jan 2020 its already 3 years. builder sent possesion letter this month and they have deemed oc, they cant do registry because oc is required . They are saying it will take time and might go to june. Delay in possesion and registry . 3 years already gone. . now what to do , i am scared ..
Dear Sachin,
May I know your exact query plz??
I have two houses registered in my name jointly with my wife Can I own another house or flat from the proceeds of sale of my father's house
Dear krishna,
One can own many houses , there is no such restriction..
But, do watch out for tax implications!
Thanks a lot
Hi Sreekant,
Hope you are doing well. Need a clarification on my under-construction flat / property sale.
I had purchased a flat on Feb 2017 (and signed the sales agreement with the builder in Feb 2017 only). Then I sold this under-construction property in the month of Aug 2019 (after ~ 2.5 yrs).
Question is: profit earned by sell of this under-construction flat, qualifies under stcg OR ltcg tax?
And if it falls under the ltcg, can I save the ltcg tax by reinvesting into a new property?
Dear Sourav,
I am doing good, thank you!
The date of Agreement or date of allotment can be considered for calculation of capital gains. As it has crossed 2 years, can be considered as LTCG.
Yes, you can claim ltcg exemption (subject to eligibility criteria).
You may kindly consult a CA as well.
Kindly read : How to calculate Holding Period & Capital Gains on sale of an Under-Construction property?
Dear Sreekanth Reddy,
I am selling the house property in my name and can the proceeds be utilized to construct house on the plot in the husbands name within the stipulated 2-3 years period. Also the cost of registration seems to be less than the indexed value of the house. In that case how the LTCG be calculated.
regards,
Rama Ammu
Dear Rama,
Theoretically, it looks ok, though the property (land) is not in your name.
This can be subject to scrutiny by the IT dept.
In some of the recent judgments, the Courts have declared that an Assessee can claim tax exemption u/s 54 / 54F, even if the proceeds /investments are made in Joint names (or) Properties owned by mother / Spouse..
Courts' View :
A residential house is not a personal effects but it is meant for residential purpose of the family. Therefore, the investment made by the assessee for purchase or construction of house even in the name of the mother /father/Spouse is eligible for deduction u/s 54F.
Related articles :
* Section 54F exemption eligible on Property Purchased in wife’s name
* Section 54 Exemption allowable even If Investment made in Joint Name of Husband
* Deduction U/s. 54F cannot be denied for construction of house on land owned by mother
What do you mean by - "cost of registration seems to be less than the indexed value of the house..." Are you referring to Registered selling price of the house owned by you ?
yes. The registration value at the time of initial purchase by me including the registration charges was say around 17 lakh in June 2010 Now if I sell it in 2020 before March 2020 then the value after indexation comes to around 30 lakh but the buyer is saying he will get it registered for 25 lakh His CA has suggested him to take the depreciation value as the property is almost 9 years old. In this case how to claim the Tax exemption or if the person will deduct the 20% as LTCG tax how can I claim it back
regards,
Dear Rama,
If the Guidance value (Govt minimum registration amount) is Rs 25 lakh then you can show this transaction as Long Term Capital Loss.
My suggestion would be to find a buyer who accepts higher Registered value (if not 100%).
Whether penalty paid to NOIDA Authorities (Uttar Pradesh) on delayed registration is eligible for cost od Indexation?
Dear SIVARAMAKRISHNAN,
If the delay reason is from their side, i believe you can claim indexation benefit.
Do kindly cross-check with a CA as well.
Hi Sreekant,
I sold a residential property in June,2019, and planning to buy a residential property to get capital gain exemption under sec.54. Should I buy the property within same financial year i.e. 31st March,2020 or till what period I can buy property to get LTCG exemption.
Also is it compulsory to register sale of the property with in the time or registration of sale agreement with possession also accepted for LTCG exemption.
Thanks in advance,
Prasad
Dear Prasad,
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.)