How to save LTCG tax after selling residential flat?

HI,i Purchased flat in unrecongnised society , in Mumbra ,in 1996 for Rs.195000 and sold it in JULY 2012 for Rs. 1500000 .so how to avoid LTCG tax? Other than opening a/c for Capital Gain Tax in bank what are the other options open to save LTCG tax?

asked Aug 03 '12 at 09:29 by Mohammed 111


As CII (cost inflation index) for 2012-13 has not been declared yet, below computation assumes CII as 850. Please adjust it once its declared.

Purchase Year = 1996-97, Purchase Cost = 195000, Cost Inflation Index (CII) for purchase year = 305
Sale Year = 2012-13, Selling price = 1500000, CII for sale year = 850
Indexed Purchase price = 195000 x (850/305) = 543443
Long term capital gain = 1500000 - 543443 = 956557
Income tax on capital gain = 956557 x 20% = 191311.4

You can save income tax if you buy/construct residential house property u/s 54 or invest into capital gain bonds u/s 54EC.

answered Aug 03 '12 at 12:01 by Pankaj Batra 5.2k320

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Asked: Aug 03 '12 at 09:29

Seen: 1,397 times

Last updated: Aug 03 '12 at 12:01