In which year is Tax on Capital Gain on Property Sale paid

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  1. Raveesha DT

    Raveesha DT New Member

    Dear Sir,

    Please clarify the doubt in following case:

    1.Property allotted to me in the year Apr-2010 (Rs.4.50 lacs)
    2.I have sold the property in June-2014 (46.00 Lacs)
    3.I have invested part of amount to buy residential site in June-2014 (Rs.30.00lacs)
    4.Planning to construct house before 31st march-2016 (Rs.30.00 lacs)

    Doubt:
    Whetehr I need to pay any capital gain tax?
    Whether it is Short/Long term CG?
    In which year return I have to declare all these transactions?
     
  2. gaurav_kumar

    gaurav_kumar Well-Known Member

    1. It is a Long Term Gain as the Asset has been held for more than 3 years.
    2. As the amount invested by you in purchasing + constructing the asset is more than the Capital Gains arising on sale of the old the asset - therefore the entire capital gains would be exempted and no tax would be levied
    3. These gains are required to be mentioned in the income tax return for the year in which the asset has been sold. As the asset has been sold in June 2014, therefore these are required to be disclosed in the income tax return for the year FY 14-15 for which the last date of filing income tax return is 31st July 2015
    4. The amount of Capital Gains which has not been reinvested in purchase/construction of the house is required to be deposited in the Capital Gains Account before filing the income tax return. Kindly refer: http://www.charteredclub.com/capital-gains-account-scheme/
     
    Raveesha DT likes this.
  3. Raveesha DT

    Raveesha DT New Member

    Dear Sir,
    Some more clarification Please:
    1.Since I have already invested Rs.30.00 Lacs for buying property(site), I may have to pay 16 lacs as advance for construction before 31st Jul-2015, whether this 16.00 lacs will be treated as re-investment?

    2.What is the time limit for deposit the CG in CG Deposit account from the date of sale property?

    3.If I want to deposit balance amount in CG Deposit account in which bank I can open an account?

    3. To file return which ITR form I should use?
     
  4. gaurav_kumar

    gaurav_kumar Well-Known Member

    1. As you have sold a Residential Property which was held for more than 3 years, you are only required to reinvest the capital gains in another residential property. And yes, construction would be considered as Reinvestment.
    2. As you have already reinvested more than the capital gains arising from sale of old property - there is no need for you deposit in capital gains account scheme. If the reinvestment is less than capital gains - then only it is required to invest the amount in capital gains account scheme.
    3. CG Deposit Account can be opened in some specified branches of nationalised banks
    4. There is no special ITR Form for disclosing Capital Gains. The Capital Gains can be disclosed in the same ITR Form which you use every year to file your return
     
  5. Raveesha DT

    Raveesha DT New Member

    Dear Sir,

    Kindly clarify whether the below case law holds good in case of registration of property title deed taken place after 8 months of allotment letter:

    Q Whether determination of title to the property would commence from the first date of allotment or the subsequent date of allotment of the actual flat number and delivery of possession for the purpose of assessing long term capital gains.
    Title to the property is transferred with the issuance of the allotment letter and payment of installments is only a follow up action and taking of the delivery of possession is only a formality. [Vinod Kumar Jain Vs CIT TIOL706-P&H (2010)]
     
  6. gaurav_kumar

    gaurav_kumar Well-Known Member

    The case law shared by you says that date of allotment would be considered as the date of acquisition and date of payment is not important.

    It states the same thing as mentioned by me in the above comments. You were allotted the property in 2010 and that date is being considered as date of acquisition of the old property.
     
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