capital gains on sale of flat

I have sold in December 2010 for rs 50 lakhs a flat that i had purchased in April 1989 for 5 lakhs. I own two other residential flats. I have already paid from Jan 2010 onwards , installments amounting to approx 45 lakhs for a new flat . The total cost of the new flat, which will be ready in mid 2011, will amount to 70 lakhs. I want to know how I can adjust the profits from the sale of the old flat against the new one so as to avoid capital gains tax. Will it be necessary for me to invest in capital tax bonds or can i offset against new flat. Thank you

asked Mar 03 '11 at 11:00 by ranjan 1111


Long term gains on old flat comes out to be around 30 lakhs after indexation computations.

As per section 54 of income tax, if you buy another flat with purchase price more than or equal to long term gains, there is no income tax payable. The new house has to be bought withing 2 years of sale of old flat.

As you are already buying a new flat for 70 lakhs (which is more than capital gains of 30 lakhs), no need to pay income tax on gains.

answered Mar 10 '11 at 02:22 by pankaj 5.2k320

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Asked: Mar 03 '11 at 11:00

Seen: 1,176 times

Last updated: Mar 10 '11 at 02:22