long term gains on property sale

I purchased a 1bhk in Malad in Nov 1999 for 7.25L, I sold the same property in June 2011 for 30L, What would be my LTCG, can i repay my existing home loan which is 3 yrs old. I am unable to buy a new property with the sale money in Mumbai.

asked Jun 27 '11 at 19:39 by rajakailas 1111

Below is indicative computation of long term gains and income tax:
Purchase Year = 1999-00
Purchase Cost = 725000
Cost Inflation Index (CII) for purchase year = 389

Sale Year = 2011-12
Selling price = 3000000
CII for sale year = 800 (Not declared yet by Govt, assumed as 800 on basis of past records)

Indexed Purchase price = 725000 x (800/389) = 1491003
Long term capital gain = 3000000 - 1491003 = 1508997
Income tax on capital gain = 1508997 x 20% = 301799.4

In order to save this income tax either you will have to buy a new flat for value more than 15.1 lacs (Section 54) or invest 15.1 lacs into capital gain bonds (section 54EC).

There is no exemption available for home loan payment. After tax deduction or investment for saving, you can spend the money anywhere.

answered Jun 28 '11 at 15:47 by Pankaj Batra 5.2k320

Hello Sir, ref to my query which you have answered, i would like to use the money to clear part of my existing home loan, the ltcg which i need to pay should be paid before which date and can i pay it in instalments? Also would i be able to add the stamp duty (rs 23750) which i paid to my purchase price. Thank you in advance
(Aug 03 '11 at 21:11) rajakailas
Income tax would have to be paid by 31st March, 2012. You can pay in any number of installments before that date. yes, you can add stamp duty in purchase cost.
(Aug 04 '11 at 14:41) Pankaj Batra

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Asked: Jun 27 '11 at 19:39

Seen: 2,295 times

Last updated: Aug 04 '11 at 14:41