Capital gain Tax

Dear Sir, My father was having a residendtial flat purchased in the year 1989 for 2.75 lac which we sold in July 2011 for 14 lacs. He has purchased another flat and invested 10 lacs from 14 lacs for purchase of new property. the remaining amnt of 4 lacs he wants to use for his personal use. Will there be long term capital gain tax on the remaining 4 lacs if he uses it for personal use? If yes how much it will be? Please guide.

asked Nov 19 '11 at 19:45 by Santosh Rangapure 111

Please find below LTCG computation:

Purchase Year = 1989-90
Purchase Cost = 275000
Cost Inflation Index (CII) for purchase year = 172

Sale Year = 2011-12
Selling price = 1400000
CII for sale year = 785

Indexed Purchase price = 275000 x (785/172) = 1255087
Long term capital gain = 1400000 - 1255087 = 144913

Long term capital gains is just 1.45 lakh, so even if your father purchases a new flat for this cost, there won't be any income tax.

Your father is free to use remaining 4 lakh left, after purchasing the new flat.

answered Nov 19 '11 at 22:36 by Pankaj Batra 5.2k320

Thanks Pankaj for your quick reply. Its relly very helpful for me.
(Nov 21 '11 at 13:57) Santosh Rangapure

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Asked: Nov 19 '11 at 19:45

Seen: 1,685 times

Last updated: Nov 21 '11 at 19:03