Hi ,
I have a query , my dad purchased a land in the year 1988 for 35k
Now we have sold that land for 10,87,000
What would be the LTCG for the same ?
How can we save , I mean where to invest ?
If I plan to buy a property now and take money from dad ( retired ) how can we transfer the money anythng to be
paid by me ??
the tax when calctd comes to 1.86 lacs plss confirm. since dad is senior ctzn hope he doesnt have to pay anythg.
Regards,
xyz
See long term gains and income tax computation below:
Purchase Year = 1988-89, Purchase Cost = 35000, Cost Inflation Index (CII) for purchase year = 161
Sale Year = 2011-12, Selling price = 1087000, CII for sale year = 785
Indexed Purchase price = 35000 x (785/161) = 170652
Long term capital gain = 1087000 - 170652 = 916348
Income tax on capital gain = 916348 x 20% = 183269.6
In order to avoid tax on this LTCG fully, one can buy a residential house property u/s 54F or invest into capital gain bonds u/s 54EC. Please note that in order to save tax fully, whole sale consideration amount needs to be reinvested and not only LTCG. If reinvestment amount is less, income tax would be payable on remaining unused sale consideration proportionally.
Hi Pankaj ,
Thanks for the expln. but what if i plan to buy a house and borrow money from dad ? Is it necessary for me to make him co-owner
If sold property was in your dad's name, capital gains would be his and income tax liability would also be his. If new property is purchased in your name, on tax benefit would be applicable. If he is co-owner is new property, tax benefit would be applicable only on cost of his part of share in new property.
Ok thanks very much for the explaination.
