Sir. A Flat at D' Silva Road Chennai600004, measuring 1500 sq ft plinth are with 965 sq ft of undivided land purchased in 1996 If I sell this property now (2011) Q1) how much capital gain tax I have to pay Q2)If I have to buy another property after this sale, to what amount should I purchase or how much should I invest to avoid paying Tax
1 Answers
You can compute capital gains and income tax by using below formula:
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%
As flat is being sold, income tax can be saved by buying a new residential house property (u/s 54) or investing into capital gain bonds (u/s 54EC). If amount invested is more than gains computed above (S) then no income tax would be payable.
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