Long Term Capital GAin

smpimparkar 1
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My father (senior citizen) have a house, he has brought in Rs 58,000/- in May 1993. In next 3 years we have modified the same as per municipal rule, but spending details are not available. Now he want to sell the house at Rs. 4,50,000/-. Can you tell us how much LTCG will come and how to pay the same. My father is pensioner drawing monthly pension mere Rs. 4,500/- from State Govt. He is not having any other source of income. He is not filing any IT return. Sir, also inform how much amount we are suppose to invest to avoid LTCG and where?

Sir Plz. reply at the earliest

pension-income income-tax-return senior-citizen long-term-gains income-tax
1 Answers

Please see long term capital gains computation below:

Purchase Year = 1993-94, Purchase Cost = 58000, Cost Inflation Index (CII) for purchase year = 244
Sale Year = 2011-12, Selling price = 450000, CII for sale year = 785
Indexed Purchase price = 58000 x (785/244) = 186598
Long term capital gain = 450000 - 186598 = 263402

This capital gain is generally taxable at 20% rate. But as your father is a senior citizen and have no other income apart from pension, his tax may be reduced.

Yearly income by pension = 4500x12 = 54000 Long term gains = 263402 Total income = 317402

As senior citizens have no income tax till 2.5 lakh taxable income, your father would need to pay 20% income tax only on remaining amount (317402-250000=67402).

Income tax can be saved if your father invest this extra amount 67402 into capital gain bonds u/s 54EC or buy a residential house property from this amount u/s 54.

Pankaj Batra5212
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