Capital gains tax

Guest (Querist) 18 August 2012 This query is : Resolved
A Lady sold her main residence in 2009 for Rs. 4,00,000/- and during the same year invested Rs. 12,00,000/- for purchasing a new flat which is still under construction.
The lady is a house wife.
Whether she will be liable to pay any Capital Gains Tax and if so how much?
Whether basic exemption and other reliefs available in the income tax act are considered while calculating Capital Gains Tax?

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pkpworld.. (Expert) 19 August 2012
The tax will be 20% on capital gain. The capital gain the excess gain from the sale value over the cost(CII). However the lady have invested all her money in flat she is entitle for exemption under section 54. No tax is due.

Adv.Ashwini Khatri (Expert) 19 August 2012
Dear Sir, Her capital gain is exempted us 54. Next to get taxation benifit,she have to get house loan from bank us 24 and 80C. Thank U

pkpworld.. (Expert) 19 August 2012
i do not understand ?

M V Gupta (Expert) 19 August 2012
As the cost of the new house is more than the price for which her old house was sold, she is not liable to pay any CG tax. (Section 54 of the IT Act). As regards ur second query, the basic exemptions etc as are applicable in the case of normal tax are not applicable for CG. CG is taxable at the special rate of 20%. But for the purpose of ascertaining the CG one has to take into account the indexed value of the old asset and not the original price at which the old asset was purchased.

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