INCOME / WEALTH TAX
DEVENDRA
(Querist) 28 September 2009
This query is : Resolved
One has purchased property in 1995 for Rs. 35,000/-. Now the property's govt. value as per chart is Rs. 3,20,000/-.
he wants to sale the land. His consideration price is Rs. 3,50,000/-.
How many amount of tax he will have to pay ?
What are the provisions ?
Raj Kumar Makkad
(Expert) 28 September 2009
You have to pay no tax on the sale of the aforesaid property because the same has been purchased a long ago at the prevailing rates and the same is also being sold on the prevailing rates. The difference of cost and sale proice is not taxable in the given case.
joyce
(Expert) 28 September 2009
hope raj is correct, also another income tax advocate expert in this lawyers community can answer this querry.
adv. rajeev ( rajoo )
(Expert) 29 September 2009
It comes under Capital Gain. There is formula for caluculation of income tax. U can also avail the benefit of investment to be made in the schmes to save the tax and to get the capital gain exemption.
Vineet
(Expert) 11 December 2009
I wish Makkadji's advice would have been correct.
Your case squarely falls under long term capital gain and tax payable is 20% and surcharge @3% on Long term capital gain.
To calculate LTCG, you have to deduct indexed cost of acquisition and any other expenditure incurred on transfer of property from the sale price.
There is a capital index value announced by CBDT for each financial year. The indexed cost of acquisition can be computed by multiplying actual cost of acquisition (Rs 35000 in your case) to the capital index value of current year and dividing the result by capital index value for year 1995-96.
Yes, you can avail exemptions under income tax depending upon the nature of property under consideration.
