LTCG on house property

manojkumar_5 1
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Hi Sir,

I purchased a flat in 2006 for Rs 13 lakhs (Agreement Value) and got in registered for only Rs 9 lakhs only( Circle Value or Government Value). Now i have sold this flat in oct 2011 for Rs 24 lakhs(Agreement value ),The Registered value for the flat is done for the value of Rs 21.50 lakhs .I have three question .

  1. Which value has to be considered for computation i.e should we consider AGreement value or Registered Value for calculating LTCG ?

  2. How much is the LTCG to be paid by your calculation ?

  3. Can i invest the Value in LTCG in purchase of a plot or should it be invested only to purchase residential house.

agreement-value registered-value residential-flat circle-rate long-term-gains section-54
1 Answers
  1. Registered value would be considered for both sale and purchase cost for computing long term gains.
  2. Please find below computation for LTCG.
    Purchase Year = 2006-07, Purchase Cost = 900000, Cost Inflation Index (CII) for purchase year = 519
    Sale Year = 2011-12, Selling price = 2150000, CII for sale year = 785
    Indexed Purchase price = 900000 x (785/519) = 1361272
    Long term capital gain = 2150000 - 1361272 = 788728
  3. As per section 54, in order to save tax fully, you will have to buy a residential house property for cost more than 7.9 lakh or construct a house from this amount. If a plot is purchased, house must be constructed on that within three years from sale of old flat.
Pankaj Batra5212
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