i have sold a land for rs. 97 lakh in july 2011 bougth in 1980 for rs. 4 lakh, The valuation of the plot is rs. 2.51 cr. but due to its location very close to a slum area it is sold at a very low price. how much long term capital gain tax i will have to pay and how could i save it.
1 Answers
Long term gains will be computed minimum as per circle rate prices. If Govt valuation of plot is Rs 2.51 crore then gains will be computed according to it.
If capital gains has to be computed according to 97 lakh, you can see below calculation:
Purchase Year = 1981-82
Purchase Cost = 400000
Cost Inflation Index (CII) for purchase year = 100
Sale Year = 2011-12
Selling price = 9700000
CII for sale year = 785
Indexed Purchase price = 400000 x (785/100) = 3140000
Long term capital gain = 9700000 - 3140000 = 6560000
Income tax on capital gain = 6560000 x 20% = 1312000
Related