Greetings! I am about to sell an apartment (it is 25 years old property and I am the first owner) in Chennai city. I bought it for about Rs 4.2 Lakhs and am lkely to get about Rs 60 to 64 lakhs. Roughly what will be the capital gains value now and how much to park in a CGAS account where to invest/park the balance? I can not pay any tax as I am now retired and have no significant savings or even pension income either. I intend buying a new apartment in FY 2012-13 with the money I get by the sale now. Thanks.
1 Answers
Below is an indicative computation of capital gains:
Purchase Year = 1986-87
Purchase Cost = 420000
Cost Inflation Index (CII) for purchase year = 140
Sale Year = 2011-12
Selling price = 6400000
CII for sale year = 785
Indexed Purchase price = 420000 x (785/140) = 2355000
Long term capital gain = 6400000 - 2355000 = 4045000
Income tax on capital gain = 4045000 x 20% = 809000
You will have to deposit around 40 lacs into capital gain accounts scheme (CGAS). Money can be paid from this account towards new house purchase.
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