I have purchased half undivided share of a property in 1992, the total cost is Rs.3 lakh. The property owned by me is developed in 2003 and the amount incurred is Rs.3 lakhs. In both the cases Housing loans availed. The entire property, including my portion of half undivided share, was given for development of flats in 2011. The consideration received by me is Rs.20 lakh, by cheque from the builder & a 2BHK Flat of 900sft. The going rate is Rs.5000 per sft. The entire amount of Rs. 20 lakh is used to clear the housing loan outstanding & Children educational loans. The possession of new flat is expected in Aug.2012. Pl inform whether Capital Gains Tax is applicable, If so, How much.
1 Answers
Indexed cost for the property would be around 15 lakh in 2011-12. As consideration amount for the sale of this property is around 65 lakh (20 lakh as cheque and remaining 45 lakh flat value). So long term gains would be around 50 lakh.
Now as 45 lakh has been reinvested into new flat (notional), you can save income tax on 45 lakh of long term gains. Thus income tax would only be payable on remaining 5 lakh @ 20%.
As possession is being received after last date of income tax return filing for FY 2011-12, opening a capital gain scheme account is mandatory. Please deposit some unused amount of gains into this account for tax record purposes. After possession, you can get amount back after clearance from income tax officer.
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