Dear Sir,
I had purchased a flat in 1999 for Rs.6 lacs. I had sold it for Rs.25 lacs in 2012. What is the LTCG and what are the ways to avoid LTCG?
S K Mishra
Dear Sir,
I had purchased a flat in 1999 for Rs.6 lacs. I had sold it for Rs.25 lacs in 2012. What is the LTCG and what are the ways to avoid LTCG?
S K Mishra
See computation for LTCG and income tax below:
Purchase Year = 1999-00, Purchase Cost = 600000, Cost Inflation Index (CII) for purchase year = 389
Sale Year = 2011-12, Selling price = 2500000, CII for sale year = 785
Indexed Purchase price = 600000 x (785/389) = 1210797
Long term capital gain = 2500000 - 1210797 = 1289203
Income tax on capital gain = 1289203 x 20% = 257840.6
To save this income tax fully, either you can buy another residential house property for cost more than 12.9 lakh u/s 54 or invest gain amount (12.9 lakh) into capital gain bonds u/s 54EC.
thanks a lot.