Long term capital gains tax

Have purchased a land in March 2002 for RS.120350 including the stamp duty.Spent Rs.40000/- for compound wall/fencing in 2002(Don't have any bills).Paid Rs.4800 tax from 2002 to 2011 and sold it for Rs.1680000 in April 2011.From the capital gain I purchased a apartment in Auguest 2011 for Rs.1400000 including registration cost.Again spent Rs.30000 for painting and minor repairs.Kindly let me know the tax.I am a retired person without any income. Parthasarathy

asked Feb 17 '12 at 19:44 by capital gains 1111

Please find below computation for long term gain, exemption and income tax payable

Purchase Year = 2001-02, Purchase Cost = 120350, Cost Inflation Index (CII) for purchase year = 426
Sale Year = 2011-12, Selling price = 1680000, CII for sale year = 785
Indexed Purchase price = 120350 x (785/426) = 221772
Long term capital gain = 1680000 - 221772 = 1458228
Income tax on capital gain = 1458228 x 20% = 291645.6
Invested Amount = 1400000
Non-exempted capital gains = 1458228 *(1-1400000/1680000) = 243038
Income tax on non-exempted capital gains = 243038 x 20% = 48608

Compound fencing spend, municipal taxes, painting cost cannot be added to purchase cost.

Above income tax may be reduced further if you don't have any other income in financial year. You can deduct 1.8 lakh from non exempted capital gains(2.43 lakh) and pay 20% on remaining gains.

answered Feb 20 '12 at 19:58 by Pankaj Batra 5.2k320

Dear Mr.Pankaj, I would add the following: My age is 61 years. Getting LIC annuity Rs.62000/- and annual interest of Rs.72000/- Kindly need your advice. Regards, Sarathy
(Mar 03 '12 at 17:16) capital gains
You would need to pay 20% income tax on (72000+243000)-250000.
(Mar 07 '12 at 16:05) Pankaj Batra
Dear Mr.Pankaj,How the calculation will be without indexation? Regards,Sarathy
(Mar 08 '12 at 10:24) capital gains
Dear Mr.Pankaj, I found as per your input Rs.65000/- is over and above the tax slab and can avoid tax by investing this Rs.65000/- in sec.80C term deposit. Regards, Sarathy
(Mar 09 '12 at 09:51) capital gains
Calculation without indexation is not allowed in case of such asset sale. 80C deduction won't be available against capital gains.
(Mar 09 '12 at 14:26) Pankaj Batra

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Asked: Feb 17 '12 at 19:44

Seen: 1,762 times

Last updated: Mar 10 '12 at 11:10