I am planning to sell a residential plot which I had purchased in 2004 (purchase price of Rs.87000/-) at a sale price of Rs.8 Lakh. What will be my Long Term Capital Gain Tax which I have to pay now and what are options available to get exemption from paying thie LTCG Tax. As I already have a residential house in my name, I would like to invest this amount in any Bonds.
1 Answers
Please find below computation for capital gains and income tax
Purchase Year = 2004-05
Purchase Cost = 87000
Cost Inflation Index (CII) for purchase year = 480
Sale Year = 2011-12
Selling price = 800000
CII for sale year = 785
Indexed Purchase price = 87000 x (785/480) = 142281
Long term capital gain = 800000 - 142281 = 657719
Income tax on capital gain = 657719 x 20% = 131543.8
You can save tax fully by investing whole sale consideration amount (8 lacs) into capital gains bonds u/s 54EC.
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