Long Term Capital Gain Tax

I am planning to sell a residential plot which I had purchased in 2004 (purchase price of Rs.87000/-) at a sale price of Rs.8 Lakh. What will be my Long Term Capital Gain Tax which I have to pay now and what are options available to get exemption from paying thie LTCG Tax. As I already have a residential house in my name, I would like to invest this amount in any Bonds.

asked Aug 20 '11 at 18:44 by HARIR 1111

Please find below computation for capital gains and income tax

Purchase Year = 2004-05
Purchase Cost = 87000
Cost Inflation Index (CII) for purchase year = 480

Sale Year = 2011-12
Selling price = 800000
CII for sale year = 785

Indexed Purchase price = 87000 x (785/480) = 142281
Long term capital gain = 800000 - 142281 = 657719
Income tax on capital gain = 657719 x 20% = 131543.8

You can save tax fully by investing whole sale consideration amount (8 lacs) into capital gains bonds u/s 54EC.

answered Aug 21 '11 at 17:07 by Pankaj Batra 5.2k320


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Asked: Aug 20 '11 at 18:44

Seen: 2,009 times

Last updated: Aug 21 '11 at 17:07