tax on sold house income
perwinder
(Querist) 21 February 2014
This query is : Resolved
hi
I just sold my old house in 20 lacs and the buyer made the registry on 17.4 lacs rupees.
so out of 20 lacs 7.5 lacs I have given to my uncle in cash and rest 12.5 lacs buyer cheque to my icici saving account. .. in the deed buyer mentioned the cheque no. and amount 12 lacs and 50 deposited cash to my account.
mt question is do I have to pay any tax.
thanks
R.V.RAO
(Expert) 22 February 2014
first you need to calculate through your auditor,the capital gain /loss made by you in sale of the old house.
capital gain is the diff.between purchase price and sale price of the house sold.
your auditor will apply indexation and arrive at indexed cost.(purchase price stated above).
if you plan any investment as per
sec 54 F/54EC, keep the capital gain amount in capital gain bank account before due date of filing tax return.
else pay 20% CAPITAL GAIN TAX and 3% edu.cess on same subject to calculation of cap.gain.
first consult your auditor with details and documents.he will advise you.
what i gave you is a simple overview.
Guest
(Expert) 22 February 2014
For Exact Confirmation Better Discuss with your Auditors
Rajendra K Goyal
(Expert) 22 February 2014
You may have to pay Capital Gains tax. Consult your tax adviser.
perwinder
(Querist) 22 February 2014
my capital gain is 12 lacs as per of inflation index.... and I dont want to pay 2.5 lacs as tax.... Its better to invest it... pls suggest if i invest it into property....would it save the tax...and also I dont have any auditor.... thats why I logged in at lawyers club.
T. Kalaiselvan, Advocate
(Expert) 22 February 2014
Your auditor will be the better persons to handle this situation, consult him with details.
R.V.RAO
(Expert) 22 February 2014
yes. by investing the entire amount of capital gain, U/S 54F/54EC,you can save tax.
till such inv.is made ,park the capital gain amount in capital gain account scheme in a designated bank,before due date of filing tax return.
you have time of 2 years to buy a new property or 3 years to construct a new property.
Dr J C Vashista
(Expert) 23 February 2014
Contact local tax consultant/chartered accountant to save tax, if it is a "Capital Gain" under the provisions of Income Tax Act, 1961
Anirudh
(Expert) 23 February 2014
Mr. R.V.Rao, has already very correctly and aptly answered the query as to how to save capital gains tax.
perwinder
(Querist) 23 February 2014
mr rv rao thanks for the suggestions.
ok if I invest the capital gain in buying residential plots would it consider under tax saving?
Anirudh
(Expert) 23 February 2014
You cannot save capital gain which arises in your hand by sale of residential house, by buying plots. In fact, you have to buy / construct new residential house/flat.
R.V.RAO
(Expert) 23 February 2014
thanks.sri aniruthji
perwinder
(Querist) 24 February 2014
Thanks for everyone
FYI
This amount is named to my mother in the sale deed (registry) and cheques are made to my mother name. But, due to some issue with my mother bank account (at that time) the owner bank, did the modification in my mother name to YOUR SELF and wired the money (RTGS) my icici saving bank account.
As of now, the son has the 12 lacs in his saveing bank account.
So, I have three years to report to IT my return, right?
Rajendra K Goyal
(Expert) 24 February 2014
It seems that the property was in the name of your mother and the money is in your account. It has to be invested by your mother in her name to save capital gains tax.
Since you are revealing the facts in installments, it is better to consult some tax adviser to avoid future complications.
R.V.RAO
(Expert) 25 February 2014
if the property is in the name of your mother,all above stated actions including cap.gain account scheme should be in her name.
you shall transfer to her bank A/C the wrong amount of credit given in your account.
perwinder
(Querist) 25 February 2014
Ok thanks
but what about the transaction recorded in my statement?
R.V.RAO
(Expert) 27 February 2014
IT IS A MISTAKE.HONESTLY ACCEPT SO ,IF AND WHEN ASKED ABOUT ENTRIES IN YOUR BANK A/C BY ASSESSING OFFICER.I DO NOT VISUALIZE SUCH POSSIBILITY NOW .WHEN YOU COME TO THE BRIDGE,YOU NEED TO CROSS THE BRIDGE.
FIRST THINGS FIRST.ACT FAST FOR WHATEVER IS REQUIRED NOW ON YOUR PART/MOTHER PART,AS DETAILED ABOVE.
R.V.RAO
(Expert) 27 February 2014
IT IS A MISTAKE.HONESTLY ACCEPT SO ,IF AND WHEN ASKED ABOUT ENTRIES IN YOUR BANK A/C BY ASSESSING OFFICER.I DO NOT VISUALIZE SUCH POSSIBILITY NOW .WHEN YOU COME TO THE BRIDGE,YOU NEED TO CROSS THE BRIDGE.
FIRST THINGS FIRST.ACT FAST FOR WHATEVER IS REQUIRED NOW ON YOUR PART/MOTHER PART,AS DETAILED ABOVE.
Vineet
(Expert) 03 March 2014
From the facts disclosed, the house was in your mothers name. Sold for 20 lakhs, registry for 17.4 Lakhs. Rs 12.5 Lakhs received in your bank account in place of your mothers. Balance 7.5 Lakhs in cash. You say indexed cost of house is 5.4 Lakhs, so long term capital gains of Rs 12 Lakhs arise. Proceeding with these facts.
Well the capital gains tax liability arises in your mother's hands. She will have to pay 20.06% LT Capital Gains Tax. It can be saved by reinvesting capital gains amount in new house u/s 54, eligible capital gains bonds u/s 54EC. Since its a case of sale of residential house, section 54F does not have applicability.
The new propoerty on bonds to be in name of your mother only. You can buy new house within 2 years or construct new house in 3 years. For that capital gain amount to be kept in capital gains account in your mother's name. Yes, a plot can be bought, but above that a house also need to be constructed (it may not be full bungalow, but atleast a livable dwelling).
No issues with money received in your account. It shall be deemed as gift from your mother and non taxable if you continue to retain that.
By the way, why remaining transaction amount was received in cash? if it is disclosed, deposit in bank account and put it for constructive purpose.
perwinder
(Querist) 03 March 2014
thanks veenit. the remaining amount given to my uncle and he wants it in cash.
Currently, what I m trying to do is, buying a flat with that amount on my mother name but the amount getting transferred to the seller from my account. becz my account doest have cheque book, also branch not getting transferred to delhi, to open a new account my mother need local address proof on her name which we dont have now. Anyway I m trying my best to get her account asap.
perwinder
(Querist) 03 March 2014
sorry my mother account doesn't have cheque book. ... very old and rural account.
