How to Compute Capital Gains on Sale of a Property?

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  1. amit_k_13

    amit_k_13 New Member

    I have a query Regarding Capital Gain on Property Sale :

    1. Property Purchased in Mumbai in Aug 2001 @Rs. 10,25,000/-
    2. Property Sold in Oct 2014 Market Value @Rs. 80,00,000/- Agreement Value @Rs.70,00,000/-

    Q 1. What is the Cost Inflation Index (CII) / CPI for 2014-15

    Q2. What will be Indexed Purchase Price & Capital Gain

    Q3. The Index Purchase Price is calculated on Market Value or Agreement Value.
  2. gaurav_kumar

    gaurav_kumar Well-Known Member

    Cost Inflation Index for 2014-15 is 1024

    Indexed Cost of Acquisition = 10.25 L * 1024/426 = 24.63L

    Capital Gains = Agreement Value - Indexed Cost of Acquisition i.e. 70L - 24.63L = 45.37L

    Indexed Purchase Price is calculated on Agreement Value
    amit_k_13 likes this.
  3. amit_k_13

    amit_k_13 New Member

    Dear Gaurav Sir Thank you for your valuable information. Want to reconfirm the Indexed Purchase Price is calculated on Agreement Value and not Market value ( On which Stamp duty is paid and registered)

    Also i have a small query As per above calculation Capital gain Of Rs 45.37L is taxable and can be invested in Real Estate to Save Income Tax on it. Can i invest the capital gain for Eg 30 Lakhs in Residential Apartment and 15.37 lakhs in Empty NA Plot or i have to invest Entire capital gain in single property for Tax exemption. And What about the remaining 24.63L . Can i Open a Fix Deposit of 24.63 and for that Do any Tax needed to paid for Remaining 24.63L for using it as a Bank FD
  4. gaurav_kumar

    gaurav_kumar Well-Known Member

    Rs. 24.63L can be invested anywhere.

    Rs. 45.37L should only be invested in a single property and not in multiple properties. This amendment was introduced in Budget 2014
  5. amit_k_13

    amit_k_13 New Member

  6. amit_k_13

    amit_k_13 New Member

    Dear Gaurav Sir,
    I have a small query. 1.

    How much maximum time do i have to invest the Capital Gain of 45.37L in a property to avoid the Tax ?
  7. gaurav_kumar

    gaurav_kumar Well-Known Member

    In case you intent to reinvest the capital gains in purchasing a Residential House - the time allowed to do so is 2 years after the sale of property.

    In case you intent to reinvest the capital gains in construction of a house property, the time allowed in this case would be 3 years after the date of sale of property
  8. amit_k_13

    amit_k_13 New Member

    Dear Gaurav Sir Thank you for your response.If suppose we reinvest the capital gain in property with in 2 years till then can we keep the capital gain amount in saving account or where the capital amount need to be kept for saving tax
  9. gaurav_kumar

    gaurav_kumar Well-Known Member

    You can keep this amount till the time you haven't filed your income tax return which would be 31st July in your case.

    However, at the time of filing of income tax return - this amount should be deposited in Capital Gains Account

    For more on Capital Gains Account, kindly refer:
  10. runinit

    runinit New Member

    Dear Gaurav,
    I need your help .

    I bought a 3 bed room flat at sector 45 Noida. There were three partners in this property. It was a construction linked plan. Total value of the flat was Rs 62,03,054/-. (we paid according to this construction linked plan from Jun 2011 onwards till the date it was sold July 2014 -- Rs 553630/- ) Due to separation with my wife It was decided to sell the house. It was sold for Rs 83 lakhs 72 thousand. ( differnce was taken care by the person who took the House)

    I also paid the transfer charges Rs 125983/-If we divide the profit which is Rs 2168946/- in three parts then each ones share is Rs 722982/-Is this amount taxable we started paying in Jun 2011 and the property was sold in August 2014 and still it was under I can save the tax. I am also planning to buy a house in this financial year.

    I am little confused since no registry was done there was only a deed and the flat is still not ready.

    Kindly help me.

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