A unit bought in 1996 for Rs 513000 vide registered sale deed was sold in 2011 for Rs 4410000. There are two aspects that are confusing & need help on. Firstly the said property was registered as a Unit in 1996 no specified use mentioned in the registered deed & due to change in land use by the Delhi govt laws the same became commercial, Thus the registery in 2011 was a commercial registry. Also the property was jointly bought by a Husband & Wife in 1996 & during the course the husband expired & willed his share to his wife. The property was sold to pay off Bank debts of companies that both were directors / partners off. No property was bought out of the remaining funds. What are the Tax liablities in such case & expemtions if any available. The seller is female aged 65 years old.
1 Answers
Please see below computation:
Purchase Year = 1996-97, Purchase Cost = 513000, Cost Inflation Index (CII) for purchase year = 305
Sale Year = 2011-12, Selling price = 4410000, CII for sale year = 785
Indexed Purchase price = 513000 x (785/305) = 1320344
Long term capital gain = 4410000 - 1320344 = 3089656
Income tax on capital gain = 3089656 x 20% = 617931.2
As such there is no different treatment of capital gain for senior citizens. At max they can reduce non-taxable limit range if they have no other income.
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