CAPITAL GAIN TAX

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  1. ALOK BATRA

    ALOK BATRA New Member

    Dear Expert...
    I had a plot in my name. Registered in 1977 for Rs 10000.
    I sold it in June 2016, a month back for Rs 54 Lakhs. TDS of Rs 54,000 paid by buyer.
    Got Rs 53, 46,000/-. How do I find the amount liable for Capital Gain.
    Further, Whats my liability. I understand ....
    1. I can either purchase Capital Gain bonds ( NHAI/REC) for Rs 50 LAKHS blocked for 3 years.
    Or pay 20 % tax on Rs 50 Lakhs now. Which is a better option.
    Thereafter the money will be free for use.
    2. What about the balance amount. What needs to be paid for that.
    3. I have received the challan for the TDS paid by buyer. When and How to claim that back.
    4. Please help.
    Thanx.
    Alok
     
  2. ZED

    ZED Well-Known Member

    Sir, this can be decided by you only. We can only assist you in providing the information in this regards.
    • How you computed 50Lacs will be the amount on which tax shall be payable?
    • Tax shall be payable on capital Gain amount.
    • In NHAI/RECL bonds, you save tax of 20.60% in the first year and earn 6% interest for 3 years , that too risk free. You should consider the net effective rate (by considering the tax saving). If you can earn more than that by investing in equivalent 3 year horizon then you should pay tax and invest the money somewhere else.
    Only capital gain amount needs to be invested, you may utilize the remaining amount for any legal purpose.


    At the time of filing of return for F.Y 2016-17.


    For other queries you may mail me. I hope all your queries have already been answered.
     
  3. ALOK BATRA

    ALOK BATRA New Member

    1. Thanx for the inputs. But how do I work out the amount on which Capital Gain needs to be paid.. I mean how to work out the indexed cost of property as on date.
    2. In case the capital gain amount is all of 54 lakhs because of initial price of Rs 10000 being low and 50 lakhs goes into bonds, then what about capital gain tax on balance 4 lakhs.
    3. 6% interest taxable on bonds is understood. But whats the tax saving of 20.60% in the first year.
    Pardon me for not being knowledgeable on this front. Please educate.
    Thanx
     
  4. ZED

    ZED Well-Known Member

    You should approach a registered valuer.


    Only the amount of capital gain needs to be invested and not the entire net consideration. For remaining amount , you might have to pay tax.
    You also have an option to buy a residential house property (if you do not have more than one residential house property, other than the new one.)



    Tax saving of 20.60% [This is the tax on capital gain]
     
  5. V K Khanna

    V K Khanna Active Member

    Although @ZED has clarified all your queries, it appears you need some more clarity on the issue particularly as to how the Capital gains would be worked out on property purchased prior to 1.4.1981 ie the date when the indexation benefits came into being.

    2. A similar query was answered in this forum recently. You can go through the following link

    www.forum.charteredclub.com/threads/capital-gains-tax.11680/#post-28271
     
  6. ALOK BATRA

    ALOK BATRA New Member


    THANX A LOT FOR YOUR INPUTS AND THE EDUCATION. GRATEFUL.
     
    V K Khanna likes this.
  7. V K Khanna

    V K Khanna Active Member

    ZED likes this.
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