my grandfather had a DDA alloted plot in 1981 for 7082 rupees . On which he done construction 1982 and i have no proof of construction except naksha. He expired in 1997 and all the legal heirs transfers their share to her mother name in 2011 i.e my grandmother .Now she sell this property for 42 lakh rupees in 2011 and buys a flat for 15lakh 60 thousand rupees in her name and she wishes to buy another residential property of 22 lakh .please suggest her tax liability.
1 Answers
Please compute long term gains first using the computation below. Construction cost in 1982 has been assumed as 10,000 and please change it as per required.
Purchase Year = 1981-82
Purchase Cost = 7082
Cost Inflation Index (CII) for purchase year = 100
Construction Year = 1982-83
Construction Cost = 10000
Cost Inflation Index (CII) for Construction year = 109
Sale Year = 2011-12
Selling price = 4200000
CII for sale year = 785
Indexed Purchase/Construction Cost = 7082 x (785/100) + 10000 x (785/109) = 127612
Long term capital gain = 4200000 - 127612 = 4072388
Income tax on capital gain = 4072388 x 20% = 814477.6
As per above calculations, Long term gains is around 40.7 lacs.
In order to save income tax fully on this, whole gain amount (~40.7 lacs) has to be invested in a single residential house property within next two years of sale.
If she buys a residential flat for 22 lacs, 20% income tax will be payable on remaining 18.7 lacs.
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