LTCG flat bought in 2007

Sir, I live in US, Have Pan card, bought property with US $ converting in Rs. in June 2007 for 24 Lakhs now selling for 58 Lakhs in Dec. 2011. How much will be capital gain if I don't buy any more real estate & What is the best way to save taxes, how much & what should I invest in and how long do I have to invest. Can I also deduct monthly maintenance charges & yearly taxes from gains to calculate taxes. If I have to pay any taxes by what date I have to do so.

asked Nov 11 '11 at 08:37 by manojk 1111

Thank you Pankajji, I really appreciate for your prompt Answer. If you don't mind clarifying few details. In my case Can I invest more than 23.81 Lakh, say 50 Lakh in (u/s 54EC) and what if I sell my above flat at the same price in Jan. 2012 instead of in Nov. 2011, LTCG amount will change? . Thanks again..
(Nov 14 '11 at 12:57) manojk
Yes, you can invest more amount that capital gains into capital gain bonds. There won't be any difference if you sell in Jan 12 as it will still lie in same financial year. One more thing, its not clear whether the property was an residential house/flat or a plot. In case it is a plot, section 54F would apply and you would need to invest full sale consideration amount (rather than only LTCG) to save tax fully.
(Nov 15 '11 at 23:40) Pankaj Batra

Long term capital gains and income tax is computed below:

Purchase Year = 2007-08
Purchase Cost = 2400000
Cost Inflation Index (CII) for purchase year = 551

Sale Year = 2011-12
Selling price = 5800000
CII for sale year = 785

Indexed Purchase price = 2400000 x (785/551) = 3419238
Long term capital gain = 5800000 - 3419238 = 2380762
Income tax on capital gain = 2380762 x 20% = 476152.4

To save income tax fully, either you can buy a residential house property (u/s 54) or invest into capital gain bonds (u/s 54EC) for an amount more than long term gains (23.81 lakh).

You cannot deduct monthly maintenance charges & yearly taxes to reduce long term gains.

If you not going for tax saving, you would need to pay this income tax by 15th march, 2012.

answered Nov 11 '11 at 10:59 by Pankaj Batra 5.2k320


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Asked: Nov 11 '11 at 08:37

Seen: 1,852 times

Last updated: Nov 15 '11 at 23:40