ltcg on property sale

my grandfather had a DDA alloted plot in 1981 for 7082 rupees . On which he done construction 1982 and i have no proof of construction except naksha. He expired in 1997 and all the legal heirs transfers their share to her mother name in 2011 i.e my grandmother .Now she sell this property for 42 lakh rupees in 2011 and buys a flat for 15lakh 60 thousand rupees in her name and she wishes to buy another residential property of 22 lakh .please suggest her tax liability.

asked Sep 01 '11 at 20:02 by aadi 1455


Please compute long term gains first using the computation below. Construction cost in 1982 has been assumed as 10,000 and please change it as per required.

Purchase Year = 1981-82
Purchase Cost = 7082
Cost Inflation Index (CII) for purchase year = 100

Construction Year = 1982-83
Construction Cost = 10000
Cost Inflation Index (CII) for Construction year = 109

Sale Year = 2011-12
Selling price = 4200000
CII for sale year = 785

Indexed Purchase/Construction Cost = 7082 x (785/100) + 10000 x (785/109) = 127612
Long term capital gain = 4200000 - 127612 = 4072388
Income tax on capital gain = 4072388 x 20% = 814477.6

As per above calculations, Long term gains is around 40.7 lacs.

In order to save income tax fully on this, whole gain amount (~40.7 lacs) has to be invested in a single residential house property within next two years of sale.

If she buys a residential flat for 22 lacs, 20% income tax will be payable on remaining 18.7 lacs.

answered Sep 02 '11 at 17:30 by pankaj 5.2k320

link

Know someone who can answer? Share a link to this question via email, twitter , or facebook
.

Your answer
toggle preview

Follow this question

Once you sign in you will be able to subscribe for any updates here

Markdown Basics

  • *italic* or __italic__
  • **bold** or __bold__
  • link:[text](http://url.com/ "title")
  • image?![alt text](/path/img.jpg "title")
  • numbered list: 1. Foo 2. Bar
  • to add a line break simply add two spaces to where you would like the new line to be.
  • basic HTML tags are also supported

Tags:

×777
×339
×326
×99
×2

Asked: Sep 01 '11 at 20:02

Seen: 1,221 times

Last updated: Sep 02 '11 at 17:30