Anu 20 February 2018

Capital gain tax

Hi, I have sold out my commercial property in dec 2017 which i had purchased in 2002. Now the overall capital gain that i have incurred is Rs. 32 Lakh. I do not wish to invest in buying a property. I have also got to know about the LTCG bonds by NHAI and REC. I want a little information regarding that. Where do we apply for such bonds? And after a period of 3 years of buying these bonds, can we sell them or there is a restriction to sell them out. And after purchasing these bonds my capital gain tax liability is fully waived or not.?

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4 Replies

R.Ramachandran (Advocate) 20 February 2018

You can completely avoid paying capital gains tax by taking NHAI Bond for the entire aount of Capital Gain of Rs. 32 lakh.

The NHAI Bond gives 5.25% interest perannum (which is taxable). In spite of low interest rate, you will be better of by putting the money in NHAI Bonds, instead of paying capital gains tax.

You have to approach HDFC Bank (one of the Authorised Banks) for getting the NHAI Bonds.

After 3 years, you will get the entire deposited amount of Rs. 32 lakhs. The interest amount you will get annually.

Your idea of putting the amount of capital gains in NHAI Bonds is very good. Please go ahead.

Dr. MPS RAMANI Ph.D.[Tech.] (Scientist/Engineer) 21 February 2018

Is your LTCG of Rs.32 lakhs after indexation of the purchase cost or without indexation. If whatever your LTCG after indexation is used to purchase NHAI or REC bonds within 6 month, you will have no capital gains tax liability. The bonds will carry interest, which will be taxable at normal rates. Interest will be paid half-yearly. After 3 years the principal amount will be returned to you.