senior citizen selling flat wants to avail tax exemption

My father in law is a senior citizen who wants to sell his flat. From the sale proceeds he wants monthly return for his livelihood from day 1. Without paying any taxes is it possible. Please advise.

Regards,

Abhijit

asked Feb 15 '12 at 18:12 by Abhijit Majumder 1111


First he would need to compute capital gains earned from selling the flat. If flat has been owned by him for more than three years, below is the computation for gains and income tax:

Purchase Year = A, Purchase Cost = P, Cost Inflation Index (CII) for purchase year = X
Sale Year = B, Selling price = Q, CII for sale year = Y
Indexed Purchase price = P x (Y/X) = R
Long term capital gain = Q - R = S
Income tax on capital gain = S x 20%

This income tax can only be saved either by buying a new residential property or investing into capital gain bonds.

Please note that only capital gain parts (S) needs to be invested to save tax fully. He can still use remaining sale consideration amount wherever he wants to earn monthly income.

answered Feb 16 '12 at 19:04 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
×42
×27
×4

Asked: Feb 15 '12 at 18:12

Seen: 1,167 times

Last updated: Feb 16 '12 at 19:04