capital gains on sale of house

we bought a residential flat in 2002 rs 1350000 and are selling the same now in 2011 for Rs 6400000.

kindly advise how much tax will i have to pay....

also is there a way i can save tax completely if i use this money to buy another flat for the total amount in the next one year or two...

can i keep the money that i receive in my savings account...


asked Aug 14 '11 at 12:08 by mohitgoel75 1111

Please see below computation for long term gains and income tax:

Purchase Year = 2002-03
Purchase Cost = 1350000
Cost Inflation Index (CII) for purchase year = 447

Sale Year = 2011-12
Selling price = 6400000
CII for sale year = 785

Indexed Purchase price = 1350000 x (785/447) = 2370805
Long term capital gain = 6400000 - 2370805 = 4029195
Income tax on capital gain = 4029195 x 20% = 805839

You can save this tax fully, if you invest the LTCG amount (40.3 lacs) into a new residential house property under section 54. New house should be bought within one year before sale and two year after sale of old property.

If new property is not purchased before income tax return filing of sale financial year, this amount should be kept in CGAS capital gains scheme account only.

answered Aug 15 '11 at 20:59 by Pankaj Batra 5.2k320


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Asked: Aug 14 '11 at 12:08

Seen: 1,847 times

Last updated: Aug 15 '11 at 21:34