Is income tax payable on money from property sale?

Guest (Querist) 14 December 2009 This query is : Resolved
My father selling a site of 30*40=1200 Sq. Ft. of Rupees 5 Laks in Bangalore outskirts. The buyer prchasingthrough bank loan. Bank going to give DD of Rs. 5 Laks on the date of registration. while encashing DD is it bank deducting income tax from that amount or what?. We are encahing the DD within few days. Thanks

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A V Vishal (Expert) 15 December 2009
The bank does not deduct any income tax on the D D but you must pay tax on capital gains earned on sale of the plot. However, there are certain schemes where the proceeds/capital gains can be invested in order to qualify for exemption from capital gain tax. Please note you shall qualify for these exemption only if the asset sold is a Long term asset i.e held by you for a period of more than 36 months.

Vineet (Expert) 15 December 2009
No, Bank is not going to deduct any TDS from the agreed consideration amount.

Please check whether your father is liable to pay Capital Gains tax in this transaction.

S.KARUNAMOORTHY (Expert) 15 December 2009
i agree with vishal

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