Bonds to save Capital Gains Tax

Sir

We had purchased a flat in 2001 at a value of 14.75 lcs. Stamp paper for deed was for 1,50,000, registratin fee was 14780, and charges under stamps act paid was 41750

Sold flat in July 2014 at 49.5 lcs

What is the Capital gain on this?

Can I invest the capital gain in Rly bonds ?
Or is it must that I put the Capital gain amount in CG Account and within 3 years use this to buy another residential property or construct?
What happens to the difference between Capital gain and sale amount? will that attract tax?
Can that amount be invested in FD or MF etc- any tax implication?
If my wife had a land, can I construct property on that within 3 years and get CG tax exemption? or is it necessary land also sd be in my name>
Pl clarify

 

Dear @K Pradeep Kumar

1. As you have held the flat for more than 3 years, it is a Long Term Capital Gain and therefore you can claim indexation benefit.

Sale Price = 49.5 Lakhs
Indexed Cost of Acquisition =164780*1024/426 = 3,96,090
Therefore, Capital Gain = 45,53,910

For more on Indexing, kindly refer this link - http://www.charteredclub.com/cost-inflation-index/

2. Its not necessary to invest in Real Estate only and you can invest in Bonds specified under Section 54EC as well. You'll have to check if the bonds you are investing in are covered under Section 54EC or not.

3. There wont be any tax on the difference between the Capital Gains and the Sale Amount. You can invest this amount anywhere or use it for any purpose.

 

There is something wrong in yr arriving at CG. Our purchase price was 14,75,000 Plus stamp paper of Rs.1,50,000 plus payment under stamps act of Rs.41750 plus reg. charges of Rs.14780. Hence total of acquistion charge is 1681530. Pl based on this let me know the Capital gain where selling price is 49,50,000/- in july 2014

 

Rs. 1,50,000 is the Stamp Duty Valuation of the property as mentioned in the Stamp Papers ??

OR

Is it the amount of Stamp Duty paid on purchase of property for Rs. 14.75 Lakhs ??

PS: Based on our 1st query - it seems that it is the Stamp Duty Valuation of Property

 

More clarity has been given by you in the 2nd comment and based on the details furnished in your 2nd comment

Sale Price = 49.5 Lakhs
Indexed Cost of Acquisition = 16,81,530 * 1024/426 = 40,41,988
Therefore, Long Term Capital Gain = Rs. 908012

 

Thanks for revised response.

However, u hv not answered on my other queries

1.Can this CG be invested to build a residential house on a land belonging to my wife? or is it necessary land should be in my name
2.Regarding investing in bonds, which are the bonds available currently?
3.Within how much time do I need to invest in bonds the capital gains to get exemption of taxation? what is the lock in period for the same?

 

1. There is ambiguity related to the fact whether the land on which the construction is being done should necessarily be in your own name or it will work even if it is on your wife's name.

Some CA's say that it should necessarily be in your own name whereas some are of the opinion that even if it is in the wife's name - it will work.

2. You have to purchase these Bonds within 6 months from the date of sale and the minimum lock-in period of such bonds is 3 years


3. Refer the following links for Bonds currently available:-

• http://www.nhai.org/bonds1.html
  
• https://www.sbicapsec.com/Bonds.aspx