Tax on selling land
Rupesh
(Querist) 28 January 2014
This query is : Resolved
Hi,
I am selling my land in 40lakhs and the total amount will be credited in my account in one shot by buyer. do i need to pay tax on this sale amount and if yes then how much tax?
malipeddi jaggarao
(Expert) 29 January 2014
You are required to pay Capital Gains Tax. Consult a Chartered Accountant.
R.V.RAO
(Expert) 29 January 2014
pl.state if it is agr.land or urban land.date of purchase and date os sale by you.if the land title is in your name.with such details,we can give an elaborate reply.
K .RAMESAN
(Expert) 29 January 2014
I join with Sri R V RAO
ajay sethi
(Expert) 29 January 2014
answer queries raised by expert
Surrender K Singal
(Expert) 29 January 2014
You may visit website of incometaxidia.gov.in and click for CAPITAL GAIN chapter which explains (a) which property (b) how taxable (c) how exempt (d) indexisation etc.
Rajendra K Goyal
(Expert) 29 January 2014
Till the questions raised by expert R.V. RAO ji are answered, nothing fruitful can be advised.
Rupesh
(Querist) 29 January 2014
Hi sir,
sorry for late reply..the land is urban and in the name of my mother which will be sold on 10th of feb,14. pls suggest further...
R.V.RAO
(Expert) 29 January 2014
First iam assuming your mother purchased the urban land and that the land is not ancestral.In the absence of date of purchase,i assume your mother held the urban land for 3 years or more.then only she is eligible for long term capital gain taxed @20.06% (incl3% edu.cess).indexation benefit is available only for long term capital gain.
if she held the urban land for less than 3 years before sale,no indexation benefit available and the diff,. between the land cost(plus cost of improvements and capital exp. if any on the land spent by her ) and sale price is taxed as her normal income and taxed at her regular tax rates as per her applicable tax slab.
first we need to ascertain capital gain which is diff. between the indexed cost price (indexation benefit is available being long term capital gain )
example of indexation of cost is like this. ,say her land cost price is say Rs.100 when purchased in year 2005 and another Rs 40 added as land improvement cost in same year. (total cost Rs 140)when the cost index was say 212(these year wise cost index rates are prescribed by govt. every year since 1981 . now in 2014 say the cost index is say 613. Calculation of indexed cost is 613x140/212.
Now deduct the above indexed cost from sale price.the diff.is capital gain on sale of land taxed @20.06%.
1.) she can make tax planning if she invest whole of the land sale price less her selling exp. in a res.house if she already does not own A house in her name.
pl. note above wording.total land sale price but not capital gain is to be invested in a res. house, as a tax planning devise.
2.) or else buy capital gain bonds of govt.of india. for AN AMOUNT EQUAL TO THE CAPITAL GAIN ON SALE OF LAND ( investment in such bonds LIMITED TO Max.Rs 50 lacs in a year) (THESE BONDS CARRY INTEREST rates at lesser than bank F.D rates AND LOCKED FOR 3 YEARS).
3.)ANOTHER PIECE OF LAND ALSO she may buy to save CAPITAL GAIN TAX.
so she has 3 ways of capital gains tax planning
till she invest the capital gain money as stated above, she needs to keep the same in capital gains account scheme in a bank.
R.V.RAO
(Expert) 29 January 2014
pl. notesmall correction in my above reply.
idea 3 above will not be applicable to your mother since she sold an urban land.
only repurchase of agr. land on sale of agr,land is eligible for saving capital gains tax.pl. note this as addendum to my above reply .thanks
Rupesh
(Querist) 29 January 2014
thanks sir for ur valuable suggestion...
R.V.RAO
(Expert) 29 January 2014
you are welcome Mr.Rupesh.pl. come back with feedback after you make use of LCI FORUM OPINIONS.THIS WILL HELP US SERVE THE FUTURE QUERIESTS BETTER.
R.V.RAO
(Expert) 02 February 2014
thank you sri Kalaiselvan
T. Kalaiselvan, Advocate
(Expert) 01 February 2014
