my mother purchased house for RS11000 in 1964 lived in it from last 58yrs she spent about RS 3500000 FOR REPAIRS IMPROVEMENTS remodelling so far. she sell the house for RS 7661000.THE BUILDER GIVEN rs 5161000 by cheque and agreed to give 2 apartments deucting 2500000in auust2011.she kept RS 1000000 IN POSTOFFICE SENIOR CITIZEN SCHEME AND balance to her 3 sons. pl intimate how much tax payble towards incometax.she is 78yrs housewife no income pl intimate the tax applicable and is ther any time to pay tax as trasaction was done in august only kindly help me
1 Answers
Provided data is not sufficient to compute long term gains and income tax.
However please see an example computation below. Replace it with your actual data to compute gains.
Purchase Year = 1981-82, Purchase Cost = 50000, Cost Inflation Index (CII) for purchase year = 100
Construction Year = 2001-02, Construction Cost = 3500000, Cost Inflation Index (CII) for Construction year = 426
Sale Year = 2011-12, Selling price = 7661000, CII for sale year = 785
Indexed Purchase/Construction Cost = 50000 x (785/100) + 3500000 x (785/426) = 6842031
Long term capital gain = 7661000 - 6842031 = 818969
Income tax on capital gain = 818969 x 20% = 163793.8
As CII was started in 1981, a fair market value as of 1st April 1981 would need to be used to compute long term gains.
In order to avoid income tax fully, she can buy a residential house property for cost more than capital gains. As she already bought two apartments from builder for 25 lakh, she can use one of these apartment to claim tax benefit u/s 54.
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