can capital gaintax on gold sale be invested in new property

i have sold some gold in order to fund the purchase of a new property. qs 1.does the gold sale attract capital gain tax [ gold purchased in 1995, sold in 2012 } 2. can i invest the capital gain [ if incurred } in the purchase of the new property.

asked Mar 01 '12 at 10:45 by dhiren 1111


Sale of gold would attract capital gain tax. You need to compute long term gains and income tax using below indexation method:

Purchase Year = A, Purchase Cost = P, Cost Inflation Index (CII) for purchase year = X
Sale Year = B, Selling price = Q, CII for sale year = Y
Indexed Purchase price = P x (Y/X) = R
Long term capital gain = Q - R = S
Income tax on capital gain = S x 20%

CII for 95-96 was 281 and for 11-12 is 785.

In order to save income tax on this gains fully, you can either buy/construct a residential house property for cost more than sale price of gold u/s 54F or invest into capital gain bonds u/s 54EC.

answered Mar 02 '12 at 20:15 by Pankaj Batra 5.2k320

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Asked: Mar 01 '12 at 10:45

Seen: 1,271 times

Last updated: Mar 02 '12 at 20:15