Hi Pankaj,
I have planned to sell my land which would fetch upt 7 lakhs and pay-off my housing loan. Should I pay any tax for the money I got thru the sale of the land
1 Answers
You should compute long term gains (if land has been held for more than 3 years) using below formulas:
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%
If you are getting/got possession of your new house within one year before sale of land or within two years after sale of land, then you can save income tax u/s 54F. If purchase cost of house is more than sale price of land, there won't be any income tax payable.
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