LTCG on Property - 10% or 20%?

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  1. SUBU

    SUBU New Member

    MY QUERIES ARE:

    1) IS IT POSSIBLE TO OPT FOR 10 % LTCG TAX WITHOUT INDEXATION FOR PROPERTY INSTEAD OF 20% LTCG WITH INDEXATION

    2) IN CASE OF A SITUATION WHERE A PLOT OF LAND( COST IS SAY Y) IS HANDED OVER TO BUILDER FOR DEVELOPMENT AND IN RETURN OWNER GETS ONE FLAT AND SOME AMOUNT OF MONEY ( SAY X) AND THE OTHER FLATS ARE THE BUILDERS ALLOCATION, WHAT WILL TBE THE OWNERS CAPITAL GAIN TAX LIABILITY.

    3) WILL CAPITAL GAINS EXEMPTION BE APPLICABLE IF SOME AMOUNT OF THE CAPITAL GAIN IS INVESTED IN A HOUSING PROJECT WITHIN SIX MONTHS EVEN IF THE PROJECT IS COMPLETED IN SAY NEXT 5 YEARS?

    REGARDS
     
  2. VAIBHAV DILIP RANE

    VAIBHAV DILIP RANE Active Member

    Reply,...

    1) NO.

    2)
    a] Value of Flat Acquired (Current MV) + Money Received = Rs. XXX
    b] Less: Indexed Cost of Acquisition of Plot= Rs. (XXX)
    c] Long Term Capital Gain [a-b] = Rs. XXX

    d] Value of Flat Acquired (Current MV) = Rs. XXX

    If [c] < [d] = No LTCG Tax to be paid, otherwise LTCG Tax @ 20% need to be paid on Amount exceeding.

    3) Yes.
     
  3. SUBU

    SUBU New Member

    Thank you for the replies.
    However, i am still not clear on two things with regard to point 2)...

    1) From the calculation shown above, the value of the flat received as owners allocation from the builder is deducted for computation of tax to be paid (d>c) . Will this be true even if the entire apartment( including the flat to be received by me) is developed by the builder at his own cost and no investment is made by the land owner?
    and
    2) can the value of the flat allocated to the owner ( value under d) be deducted from capital gain (value under c) for computation of LTCG tax?

    I am asking this because some one advised me that i will have to pay LTCG tax @ 20 % on value c) and this amount is coming out to be very hefty.

    Request your guidance on the above two queries.
     
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