TAX LIABILITY ON SHORT/ LONG TERM CAPITAL GAIN FROM PROPERTY
Querist :
Anonymous
(Querist) 06 April 2010
This query is : Resolved
I am a housewife and a non taxpayer. During Fy 2004-05, I had purchased a residential plot which I sold in Fy 2009-1010 and purchased a residential flat seeking full Capital Gains tax exemption under Section 54F and 54EC by buying a residential flat and NHAI bonds from the entire 'Net Consideration'. My query is, since I am in need of funds and intend to sell this residential flat in Fy 2010 – 2011, could you advise me on my tax liability by this transaction. My details are; Cost of plot(indexed): Rs 25,61,756.00 (including stamp duty); sale price of plot (Fy 2009-2010) : Rs 60,00,000.00; Cost of newly purchased residential flat : Rs 56,93,000.00; NHAI Bonds purchased for : Rs 3,25,000.00. Likely selling price of the newly purchased residential flat: Rs 56,93,000.00
In hindsight, would it have been wise for me to NOT to have re-invested in the residential flat and paid my tax then (Fy 2009-2010) and utilized my balance amount or the course of action which I intend to take now, as explained above, would prove to be a financially wiser action.
Vineet
(Expert) 06 April 2010
Your LTCG on sale of plot Rs 3438244
Exemption u/s 54EC for NHAI Bond investment Rs 3,25,000/-
Max Exemption u/s 54F for investment in new flat Rs 32,62,320/- (actually availed is Rs 3113244/-)
The LTCG of Rs 31,13,244/- shall be charged @20% tax in AY 2011-12 (of course with benefit of tax exemption limit of Rs 1.90 Lakhs if you do not have any other income).
If you knew that you are not going to hold the new flat for moe than 3 years and didn't expect any appreciation, it would have certainly a wise decision to pay capital gains tax in AY 10-11 as you must have paid stamp duty on purchase which is quite a good sum and not recoupable.
