tax saving

sir i just wanted to know how can i save tax on sale of my property

i have purchased shops in 2006 for rs 8,00,000 for which i yearly used to get depreciation on assert in the income tax and now my balance sheet value for the property shows 5,17,200 in 2011 now i have sold the property for 30,00,000 now plz tell me my gains will be treated as and how can i save the tax and how much i need to pay and iam planning to re invest the amount in residential plot

asked Aug 18 '11 at 10:31 by Yogesh Patel 1122


After indexation benefit, there will be around 18 lacs of long term gains. 20% income tax would be payable on that.

If you want to save income tax, you can invest into a residential house property (u/s 54F) or into capital gain bonds (u/s 54EC). To save tax fully, whole sale amount has to be invested back.

There won't be any exemption available if amount is invested into residential plot, unless a house is built on it within three years of sale.

answered Aug 19 '11 at 00:18 by pankaj 5.2k320

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thanks a lot sir istill have a small doubt bcoz my friend told that it will fall under 50 of income tax as i have reduced the depreciation yearly it is a depreciable assert and fall in short term capital gain plz tell is it possible
(Aug 19 '11 at 10:53) Yogesh Patel
Yogesh, you are right, as you have claimed depreciation, any gain will be short term gains as per section 50. No exemption will be provided in this case.
(Aug 19 '11 at 13:47) pankaj

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Asked: Aug 18 '11 at 10:31

Seen: 1,094 times

Last updated: Aug 19 '11 at 13:47