Capital Gain Tax on sale of a old property

Hi Mr Pankaj,

We had an ancestral property in Old Delhi which we recently sold off. I got Rs 2.65 lakhs from proceeds of sales as it was divided in 8 members. I have gifted this amount to my sister as she needed money to buy house for herself. I wish to know my capital gain liability and is there any way by which I could avoid paying taxes on Rs 2.65 lakhs? My annual income is 12 Lakh. Regards, Manish Gupta [email protected]

asked May 17 '11 at 02:21 by aymanish 1111


Income tax on long term capital gain will be computed as per below calculations:

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%

In order to save income tax on this capital gain, you can buy a new property for value more than the gain amount. Or it can be deposited into capital gain bonds.

answered May 18 '11 at 12:38 by pankaj 5.2k320

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Asked: May 17 '11 at 02:21

Seen: 2,170 times

Last updated: May 18 '11 at 12:38