Capital gain
Sri Vijayan.A
(Querist) 19 November 2010
This query is : Resolved
Four brothers bought a plot in Chennai in 1993 for a total value of Rs.16,000/-
Now (2010), it is being sold at Rs.20,00,000/-.
One of co-owners wants to construct a house on his other plot from the said sale proceed (Rs.5,00,000/-)
WILL HE GET EXEMPTION FROM CAPITAL GAIN TAX?
Thnak you in advance
adv. rajeev ( rajoo )
(Expert) 19 November 2010
Whether amount is distributed amongst the brothers? To avail the capital gain exemption he has to show the investment made and source of income.
R.Ramachandran
(Expert) 19 November 2010
Dear Mr. Vijayan,
Yes, he will get exemption from Long Term Capital Gain. [In fact entire 5 lakh is not the capital gain. From the original cost of acquisition of Rs. 4000/- (i.e. his 1/4th share) the present acquisition cost has to be arrived at by applying the inflation index. Thereafter, the said indexed cost of acquisition has to be deducted from the sale proceeds. The difference is the Capital gain. This has to be invested in acquisition / construction of another residential property within a period of 2 years from the date of sale.
A V Vishal
(Expert) 19 November 2010
He can claim exemption provided the entire amount of capital gains is invested in the new property to be constructed within 3 years from the date of sale. Further if the entire amount is not utilized within 31.03.2011 then the balance amount needs to be deposited under the CGA scheme and utilized within the said period.
Debasish Hota
(Expert) 19 November 2010
He will get exemption on entire amount ,in the event of investment of the same on the residential property within a period of two years from the date of sale.But the quntum capital gain has to be calculated first from the index, since it is a long term captal gain.
s.subramanian
(Expert) 19 November 2010
I agree with Mr.Debasish.
soumitra basu
(Expert) 02 December 2010
Only capital gain need to be invested not the entire sales proceeds.
