Capital Gain Tax

Dear Pankaj

Thanks for replying promptly, I have another query from one of friend.

He purchased a flat in Sept. 1997 for 2,58,915 and he sold on June 2011 for 20,00,000. He is not planning to invest this amount in purchase of flat.

How much is the Capital gain tax payable by him? Is there any other option to save this tax?

asked Jul 15 '11 at 00:04 by naveen 6224


Below is the computation for income tax:
Purchase Year = 1997-98
Purchase Cost = 258915
Cost Inflation Index (CII) for purchase year = 331

Sale Year = 2011-12
Selling price = 2000000
CII for sale year = 785

Indexed Purchase price = 258915 x (785/331) = 614043
Long term capital gain = 2000000 - 614043 = 1385957
Income tax on capital gain = 1385957 x 20% = 277191.4

Income tax can also be saved by investing into capital gain bonds (under section 54EC). To save full tax at-least around 13.9 lacs has to be invested.

answered Jul 18 '11 at 15:40 by pankaj 5.2k320

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Asked: Jul 15 '11 at 00:04

Seen: 1,328 times

Last updated: Jul 18 '11 at 15:40