Capital gains under Income Tax Act 1961
- Wednesday, November 30, 2011, 0:01
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Any Income derived from a Capital asset movable or immovable is taxable under the head Capital Gains under Income Tax Act 1961. The Capital Gains have been divided in two parts under Income Tax Act 1961. One is short term capital gain and other is long term capital gain.
1.Short Term Capital Gains : If any taxpayer has sold a Capital asset within 36 months and Shares or securities within 12 months of its purchase then the gain arising out of its sales after deducting therefrom the expenses of sale(Commission etc) and the cost of acquisition and improvement is treated as short term capital gain and is included in the income of the taxpayer.
The deduction u/s 80C to 80U can be taken from the income from short term capital gain apart from the short term capital gain u/s111A
Taxability of short term capital gains: Section 111A of the Income tax Act provides that those equity shares or equity oriented funds which have been sold in a stock exchange and securities transaction tax is chargeable on such transaction of sale then the short term capital gain arising from such transaction will be chargeable to tax @10% upto assessment year 2008-09 and 15% from assessment year 2009-10 onwards.
The short term capital gains other than those u/s 111A shall be added to the income of the assessee and no such benefit is available on short term capital gains arising in other cases and they will be taxed normally at slab rates applicable to the assessee.
If an assessee does the business of selling and purchasing shares he cannot take advantage of section 111A or section 10(38). In this case income will be treated as business income.
Capital gains in case of depreciable assets : According to section 50 of Income tax act if an assessee has sold a capital asset forming part of block of assets (building, machinery etc) on which the depreciation has been allowed under Income Tax Act, the income arising from such capital asset is treated as short term capital gain.
Where some assets are left in block of assets: If a part of such capital asset forming part of a block of asset has been sold and after deducting the net consideration received from sale of such asset from the written down value of the block of such asset the written down value comes to NIL then the gain arising shall be treated as short term capital gain and in such case where written down value has become NIL no depreciation shall be available on such block of asset even if some assets are physically left in the block of assets.
When no assets are left in block of assets: If the whole of the capital assets forming part of a block of assets have been sold during a year and the assessee has suffered a loss after deducting the net sale consideration from the written down value of the block of assets then such loss shall be treated as short term capital loss and no depreciation shall be allowed from such block of assets.
It was decided by Chandigarh tribunal in (2004) 3 S.O.T. 521/ 83 T.T.J. 1057 if the whole of capital assets in a block have been sold in a year and some gain arises after the sale such gain shall not be treated as short term capital gain if some new asset has been purchased within the same year in the same block of assets and the total value of new and old capital assets in the same block is more than the sale consideration of the assets sold, since the block of asset does not cease to exist in such case as is required u/s 50(2). This can be explained with an example as below:
Written down value of 5 Machinery
as on 01-04-2010 Rs. 500000
5 machinery sold on 01-05-2010 Rs. 600000
New Machinery purchased on 01-06-2010 Rs. 250000
now in above cases the difference between the w.d.v and sale value i.e Rs 100000 can not be treated as short term capital gain in the year 2010-01 since new machinery has been purchased in the same block of asset afterwards in the same year and the total of new and old machinery is more than the sale value of the machineries sold as a result the block of asset continue to exist.
Short term capital gain where land & building are sold together: Some times it happens that in a block of assets namely land & building, the whole of land & building is sold together. In such cases the capital gain on land and building should be calculated separately.
The Supreme Court has held in (1967) 65ITR 377 that depreciation is available on the value of building and not on the value of plot. Considering the above decision of Supreme Court, the Rajasthan High court in (1993)201 ITR 442 has held that Plot and building are different assets. If the assessee has purchased plot more than 3 years back and constructed building on it less than 3 years back then the gain arising on sale of plot shall be long term capital gain and the benefit of indexation shall be given on it whereas the gain arising on sale of building shall be short term capital gain and will be added to the income of the assessee. Therefore both should be calculated separately.
Where the plot has been purchased more than three years back and the building has been constructed on it less than 3 years back, it is advisable that in the sale deed the sale value of plot and building should be shown separately for more clarity and if the consolidated sale value of the Plot and building has been written in the sale deed then the valuation of plot and building should be done separately from a registered valuer.
Capital asset transferred by the partner to the partnership firm: As per section 45(3) of the Income Tax Act 1961 if any partner in a firm transfers his asset to the firm then the capital gain on such asset as arising to the partner shall be calculated by presuming the sale value of such asset as is shown in the books of accounts of the firm and not the market value of the asset.
whether such gain is treated as long term or short term will be decided as below:
a) If the depreciation has been claimed on the asset transferred to the firm then in view of section 50(2) the gain arising there from will be treated as short term capital gain.
b) If the partner has been the owner of the asset for more than 36 months and no depreciation has been claimed on it then the gain arising from such asset shall be treated as long term capital gain.
Capital gain in case of Dissolution of a Firm: As per section 45(4) of the Income Tax Act where any partnership firm or AOP or BOI is dissolved and the Capital assets of the such firm or AOP or BOI are transferred by way of distribution of assets to the partners at the time of Dissolution in such case the gain arising from such transfer to the partners will be treated as capital gain and the firm will be liable for paying tax on it in the year of distribution of the assets.
For the purpose of section 48 the fair market value of the asset on the date of such transfer shall be deemed to be the full value of the consideration received or accruing as a result of the transfer.
2. Long Term Capital Gain: A Capital Asset held for more than 36 months and 12 months in case of shares or securities is a long term capital asset and the gain arising therefrom is a long term capital gain. Long term capital gains are arrived at after deducting from the net sale consideration of the long term capital asset the indexed cost of acquisition and the indexed cost of improvement
of the asset.
The Central govt notifies cost inflation index for every year. The indexed cost of acquisition is calculated by multiplying the actual cost of acquisition with C.I.I of the year in which the capital asset is sold and divided by C.I.I of the year of purchase of capital asset. Similarly the indexed cost of improvement can be calculated by using the C.I.I of the year in which the capital asset is improved. Where the capital asset was acquired before the year 1981 then the cost of acquisition shall be the fair market value or the actual cost of its acquisition which ever is higher. The Fair market value of a capital asset can be known by the valuation of the registered valuer.
The cost inflation index table as notified is here below:
| Cost Inflation Index Notified by the GOVT | |||
| Financial Year | (CII) | Financial Year | (CII) |
| 1981-82 | 100 | 1995-96 | 281 |
| 1982-83 | 109 | 1996-97 | 305 |
| 1983-84 | 116 | 1997-98 | 331 |
| 1984-85 | 125 | 1998-99 | 351 |
| 1985-86 | 133 | 1999-2000 | 389 |
| 1986-87 | 140 | 2000-2001 | 406 |
| 1987-88 | 150 | 2001-2002 | 426 |
| 1988-89 | 161 | 2002-2003 | 447 |
| 1989-90 | 172 | 2003-2004 | 463 |
| 1990-91 | 182 | 2004-2005 | 480 |
| 1991-92 | 199 | 2005-2006 | 497 |
| 1992-93 | 223 | 2006-2007 | 519 |
| 1993-94 | 244 | 2007-2008 | 551 |
| 1994-95 | 259 | 2008-2009 | 582 |
| 2009-10 | 632 | 2010-11 | 711 |
| 2011-12 | 785 | ||
If a capital asset has been subjected to depreciation then no indexation benefit is allowed on sale of such capital asset in view of section 50(2) as discussed above.
Capital gain from Plot and building should be separately calculated: As discussed above plot and building are separate assets and the capital gain on above should be calculated separately. If the plot is purchased more than 3 years back and building has been constructed within 3 years the capital gain on plot will be considered as long term and the capital gain on building will be treated as short term capital gain.
Taxation of Long term capital gains: The long term capital gains are taxed @ 20% after the benefit of indexation as discussed above. No deduction is allowed from the long term capital gains from section 80C to 80U. But in case of individual and HUF where the income is below the basic exempted limit the shortage in basic exemption limit is adjusted against the long term capital gains.
Section 112(1) provides that any capital gain arising from a long term capital asset being the listed securities which are sold outside the stock exchange the long term capital gain shall be calculated on such securities as below:
a) Tax arrived at @ 20% on such long term capital gain after indexation u/s 48 or
b) Tax arrived at @ 10 % on such long term capital gain without indexation
Whichever is less.
The long term capital gain on equity shares or units of equity oriented mutual fund which are sold in the stock exchange and on which securities transaction tax is paid, is exempt u/s 10(38).
Section 50C: Section 50C has been introduced with effect from 01-04-2003 and is a very important section while calculating capital gain on land & building. Section 50C provides that Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by stamp valuation authority) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer.
It means that the capital gain will be calculated by considering the sale value of the capital asset as equal to the value adopted or assessed by the stamp valuation authority for that capital asset if the actual sale value is less than the value assessed by stamp valuation authority.
If the assessee claims that the value adopted by the stamp valuation authority exceeds the fair market value then the assessing officer may refer to the valuation officer for valuation of the fair market value of the asset. If the fair market value declared by the valuer is more than the value adopted or assessed or assessable by the stamp valuation authority, the value so adopted assessed or assessable by the stamp valuation authority will be taken as full value of consideration of the capital asset.
CBDT vide its circular No 8/2002 dt 27-08-2002 has declared that if the valuation officer has declared the fair market value of the capital asset less than the value adopted, assessed or assessable by the stamp valuation authority then the capital gain shall be calculated on the value so declared by the valuer.
After the adding of word assessable u/s 50C in 2009 now it has become clear that even those immovable properties in which no sale deed is entered into and which have been sold on a full and final agreement will be within the ambit of section 50C.
Exemptions from long term capital gain:
| Section | Asset | Assessee | Holding Period of Original Assets | Whether Reinvestment Necessary —Time Limit | Other Conditions/Incidents | Quantum |
| 54 | Residential House Property | Individual HUF | 3 years | Yes — In Residential House, within 1 year before, or 2 years after the date of transfer (if purchased) or 3 years after the date of transfer (if constructed).** | The amount of gains, or the cost of new asset, whichever is lower | |
| 54B | Agricultural Land | Individual | Use for 2 years | Yes — In Agricultural Land, within 2 years after the date of transfer. | Must have been used by assessee or his parents for agricultural purposes See Notes 1, 2 and 10 |
As above |
| 54D | Industrial Land or Building or any right therein |
Any Assessee | Use for 2 years | Yes — In Industrial Land, Building, or any right therein within 3 years after the date of transfer. | Must have been compulsorily acquired | As above |
| 54EC | Any Long-term Capital Asset (LTCA) | Any Assessee | Shares, Listed Securities, Units of UTI/Mutual Fund covered u/s. 10(23D) :1 year Others : 3 years | Yes — Whole or any part of capital gain in bonds redeemable after 3 years and issued on or after 1-4-2006 by NHAI or REC and notified by the Govt. – within 6 months from the date of transfer. |
The amount of gain or the cost of new asset whichever is lower subject to Rs. 50,00,000 per assessee during any financial year for investments made on or after 1-4-2007. Also investment in bonds notified before 1-4-2007 would be subject to conditions laid down in notification including limiting condi- tions (i.e., Rs. 50 lakhs per assessee) |
|
| 54ED | LTCA being listed securities or units | — do — | Listed Securities or units of UTI/Mutual Fund covered u/s. 10(23D) : 1 year | Yes — Within six months from the date of transfer in acquiring eligible issue of capital | exemption is available only in respect of the assets transferred before 1-4-2006 | — do — |
| 54F | Any Capital Asset (not being a residential house) | Individual HUF | Shares, Listed, Securities, Units of UTI/Mutual Fund covered u/s. 10(23D) : 1 year Others : 3 years | Yes — In Residential House, within 1 year before, or 2 years after the date of transfer (if purchased), or 3 years after the date of transfer (if constructed).** | If the cost of the specified asset is not less than Net Consideration of the original asset, the whole of the gains. If the cost of the specified asset is less than the Net Consider-ation, the proportionate amount of the gains. |
|
| 54G | Industrial land or building or plant or machinery |
Any Assessee | — | Yes— In similar assets and expenses on shifting of original asset, within 1 year before, or 3 years after the date of transfer. | The amount of gains, or the aggregate cost of new asset and shifting expenses, whichever is lower. | |
| 54GA | Industrial land or building or plant or machinery |
Any Assessee | — | Yes — In similar assets and expenses on shifting of original assets to a Special Economic Zone – within 1 year before or 3 years after the date of transfer | The amount of gains, or the aggregate cost of new asset and shifting expenses, whichever is lower | |
| 115F | ‘Foreign Exchange Asset’ (See Note  |
Non- Resident Indian | Shares, Listed Securities, Units of UTI/Mutual Fund covered u/s. 10(23D) : 1 year Others : 3 years |
Yes— In ‘Specified Assets’ (See Note 9) or Specified Savings Certificates of Central Government, within 6 months after the date of transfer | Same as u/s. 54F above. |
Author:
Amit Bajaj Advocate
Email: amitbajajadvocate@hotmail.com
M: 9815243335
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Very Good article. Informative & Comprehensive.
Very good,both informative and useful article.Thanks a lot for providing such articles.
very educatieve article
Very useful article. To enhance its usefulness, it would have been better to include a section on setting off of ST/LT capital gains against ST/LT capital losses.
very well presented
Really an informative and concise article . Shaabhaas
Sir, I can’t find Section 10(38) in the Income Tax Act 2009. As such does the notion that LTCG from STT paid euity shares are exempt from taxation; still hold good for A.Y. 2010-11
Yes. Even In Assessment year 2009-2010 LTCG from STT paid equity share is exempt.
I HAVE SOLD A LAND OTHER THAN USED FOR AGRICULTURE IN JANUARY,2010. THE LAND WAS PURCHASED IN 2003-04 AND CAPITAL GAIN COMES OUT TO BE APPROX 300000/- AFTER CALCULATING THE INDEX VALUE. MY QUERY IS
1. WHAT IS THE TIME LIMIT FOR THE INVESTMENT IN THE BOND.PLEASE NAME THE BOND IN WHICH I CAN DEPOSIT THE SAME AND WHAT AMOUNT I HAVE TO DEPOSIT (i.e. TOTAL SALE AMOUNT OR TOTAL GAIN)
2. IF I WANT TO INVEST IN THE RESIDENTIAL PROPERTY THEN WHAT IS THE PROVISION. IF I CONSTRUCT THE HOUSE OR I PURCHASE A FLAT. PLEASE REPLY SOON SO THAT I CAN DO AS PER YOUR ADVICE IN TIME.
THANKS
AJAY
is commercial property eligible for 54F exemption
If income is above 190000 is due to STCG THEN WILL IT BE CHARGEABLE @ 10% OR 15% for A.Y 10-11
15% . special rate will be applicable
Yes, 15% if stcg arises from shares and securities and at normal slab rate if arises from other capital assets.
LTCG arising from a commercial property is also eligible for exemption u/s 54F
If long term equity shares are sold in an off market transaction whether the resultant loss can be allowed to be set-off against taxable long term gains.
Assets comprising machinery, office equipments, car come under block of assets – Machinery & Plant. If say machinery wdv on 1.4.2009 is Rs 1,00,000 is sold for Rs 1,25,000 while WDV of office equipments and car as of 1.4.2009 is Rs 5,00,000 and depr for th year is Rs 75,000. Will the excess of Rs 25,000 received on sale of Machinery be taxed under short term capital gains, although other capital assets in the block contines ?
Q: If long term equity shares are sold in an off market transaction whether the resultant loss can be allowed to be set-off against taxable long term gains.
If LTCG arising from equity shares which is not exempt u/s 10(38)is taxable then LTCL arising from such case will also be allowed to be set off.
If the block of asset continue to exist then no stcg will arise from sale of one asset in the same block.
i have sold my commercial house property @8.5 lac with ltcg of 6 lac…… nw i also have sold my mutual fund making a long term loss of .80 lac …nw wat is the amount i need to invest in new house to avail full exemption under 54f ??
if the mutual funds are equity oriented funds, the long term gain from which if any, is exempt u/s 10(38), then the loss arising therefrom in your case will not be allowed to be set off from the LTCG arising from commericial house property, otherwise it can be set off and for the remaining LTCG you will have to invest propotionate amount of the sale proceed in a residential house to claim exemption u/s 54F.
It was very helpful as presentation was to the point and was excellent.
All the points were covered.
case examples given was found very useful
thanks.
hello,
i got one query, iam retd govt.employee.
iam having an house plot(ancestral) i want to sell it off.
and in order to avoid CAPTIAL GAINS want to purchase an AGRICULTURE land.
i want to know whether this will be ok.(i want to invest complete amount in AGRICULTURE land purchase. is there any time limit.?
i want to GIFT some amount to MY SONS AND DAUGHTERS IS THERE ANY TAX IMPLICATIONS?
what are the other options available for me to avoid the payment of CAPTIAL GAINS tax.
AS OF NOW IAM NOT PAYING ANY INCOME TAX. AS MY INCOME IS LESS THAN TAX SLABS.
thanks in advance
murthy
Sir,
I own a residential house from 1984 that is rented out all along. If I sell this house and make a net Long Term Capital Gain, am I entitled to claim exemption by investing in a specified Bond or another investing in another residential property?
Kindly note thatI also own another residential house where I dwell?
Grateful for your kind comments on this matter.
My wife has yearly will have income of less than Rs 1,90,000/- which includes short term capital gains of Rs. 15,000/-. will she pay nil tax or 15% of Rs. 15,000/-
I have bought equity shares worth Rs. 70,000 in April 2007. Current value of this is Rs. 8.7 lac.
1) If I sell these today what will be the Income Tax implecations?
2) Also, how to save this income tax?
Pl help.
I have Quried that i have sold 2 properties(Owned ) and purchase 1 new properties,out of two properties one of the properties is inharited by matronal site can i Eligable for deduction under section 54 of income tax, Act,1961 for both properties.
is sale of long term commercial property allowed for without indexation then how much tax rate is applied
is sale of long term commercial property allowed for without indexation then how much tax rate is applied?
I have a query in this regard in a specific case-
1. A commercial office purchased in March 2007 for Rs.6,80,000/- for investment purpose but not used for any personal business or profession, therefore nay depreciation is not yet claimed on this property.
2. The same office is sold in December 2010 for Rs.15,00,000/-
3. The entire consideration received is reinvested on puchase of a new commercial office in the same month i.e. December 2010 for Rs.16,00,000/-
Please advice, whether any capital gain tax is payable due to this sale transaction, if yes how much ?
X and Y both brothers acquired a property in 1998 with aquisition price 13500 vide conveyance deed , X and Y both gifted the property to X”s wife in feb 2009 with aquisition price 1720000.vide sale deed.if X”s wife sell the property in 2011 , will it cum under long term or short term capital gain…..if it’s under short term which price of aquisition will be considered to calculate the tax.
We are a family of four brothers and had an ancestral property. We got into a development agreement with a builder and later a sale deed. According to the agreement we would receive 15 lakhs each and 3 flats each on the property (which we have not received yet since the last two years). For tax calculation purpose, we got the property assessed as it was pre-1981 by a valuer. The value of the land worked out to two crores. My question is about myself. On what amount would the tax be calculated on 15 lakhs I have received or on the 2 crores which is the value of the land as per 1981 assessment? If on 15 lakhs then how much is the tax and under what section? If the tax is calculated on 2 crores then under what section?
Dear Sir
THE PROPERTY SOLD AND GETTING REGISTERED/TRANSFERED IN FEB-MARCH 11
WHEN THE CAPITAL GAIN TAX IS PAYABLE ?WHETHER IN FY 10-11
OR FY 11-12.
KLY REPLY BY EMAIL
REGARDS
KISHORE
Sir, how do we calculate long term capital for following:
1. Sale of Industrial land and building 10 years old which also has an OTS libility.
2. Does the OTS amount get added to the cost of land and building?
3. And what are the options to avail capital gain tax exemption on such property sale.
Kindly enlighten and oblige.
Sir,
I have a business with a capital of 270 lakhs with a loan of 165 lakhs, private loans and creditors are 254 lakhs and the net block is 216 lakhs and the accumulated losses are around 300 lakhs, now i want sell the unit, the buyer is interested to buy only assets in that case Please advice, whether any capital gain tax is payable due to this sale transaction, if yes how much ? the sale price is 540 lakhs approximately.Whether is short term or long term. I
Dear amit,
I encashed shares of an unlisted company after holding the shares for 2.5 years. Now I want to know what is the best way to avoid tax on the long term capital gains of about 10L .
My understanding is that I can get an exemption even if I bought a house of that value 1 year ago. My clarification is is this 1 year taken as exactly 12 months back or it is seen as being in the previous assessment year? I realised the sale now in Feb-11 and this residential property was purchased in Nov-09. Will I be able to avail the benefit?
If yes, will this benefit be available against the total value of house purchase (55L)or only the portion I paid (10L), excluding the loan value?
thanks for your time, Charles
OUR BUSINESS PROPOSE TO SELL LORRY HAVING WDV OF RS. 4.50 LAKH ON 1/4/2010.THE NET SALE CONSIDERATION WOULD BE RS.4.00 LAKH.
WHAT WOULD BE THE AMOUNT OF CAPITAL GAIN / LOSS?
if i take shorfall adjustment aganist sec.111A then what is tax rate for remaining amount under sec 111A?
Dear Sir,
We are 3 partners in a partnership firm. we purchased and sold the land within 3 years in the name of partnership firm. The firm does not have PAN no. etc. Can we transfer the amount of sale to the partner’s individual account in their ratio. And can each partner individually pay tax on his share of capital gain.
Kindly guide me.
thanks and regards
I have a Commercial Property purchased in the year July 2004, and am planning to sell the property this F Y, kindly help me in knowing the tax implication on 2 situations :
1 ) If i sold my property this year and i have some capital gain, what is the tax implication if i have not purchased any other property with the same amount.
2) If i have one more property other than the sold property , can i purchase one more property and get the exemption.
Kindly reply on priority.
I STT and Service tax allow to adjust with short term gain on shares
Hello,
I have my residential property purchased in mar2009. Agreement value is rs. 1300000.
Now i want to resale it. As per government valuation its value is rs 1900000 appr.
As i am reselling it within 3 years of its purchase do i need to pay capital gain tax.
And also advise how much tax i need to pay. Is there any exemption for senior citizen.
Awaiting Reply.
Regards,
Sushant
I HAVE SOLD A AGRICULTURE LAND(MY PARENTAL PROPERTY) TO A PRIVATE BUILDER
1. WHETHER I HAVE TO PAY INCOEM TAX ON LONG TERM CAPITAL GAIN ON SAID PROPERTY
2. HOW CAN I SAVE MY TAX
THANKS
VIRENDER
We have an old property that we are now collaborating with a builder to develop. 4 floors will be built and we will reatin 2 and the builder will take 2. In lieu of these floors the builder will build the building at his expense and is giving us a sum of money on the execution of the agreement.
This sum of money will attract a LTCG at the time the 2 properties given to the buider are registered. This would take about 2 years.
We wish to invest the sum of money recieved by us in a residential house to offset this capital gain liability and would like to do so today i.e. about 2 years before the registration of the sold part is done.
The law states that we can do so 1 year prior to the sale of the property.
How can we invest in the property today and get the set off for the capital gains liability.
Thanks
Sir,
In case somebody is having house on his land and after 32 years he went for collaboration agreement with the builder. builder is taking one floor and giving some amount to owner.presently it is two store house which builder will demolish and construct four store house.
What will be the status of capital gain tax on the owner?
Regards
Vijay Mathur
did you got the answer for your question yet..plz let me know how will d tax be calculated on ur case?
Please let me know, if I have purchase a property in May 2007 and sold the same in Sep 2010 (after more than 3 year), So shall it will be consider as long term capital gain?
Also required some clarification.
1. As proof of purchase, I only have the allotment letter, this property was never register or agreement was created, So allotment letter can be consider and date of allotment as consider as date of purchase and whether it will be any issue, since I do not have any sale deed or registration not done?
i want to sale my industrial property land and shed which was bought by me in the year 1995. shed was shown as depreciated in balance sheet during it returns.
please advice me about capital gains both long term and short term.
Sir,
My WDV of the block of assets are Rs.10,000 and i was sold the total block of assets for Rs.1800, still some worthless assets are in that block. During the year i bought new assets worth of Rs.25,000. Can you please tell me the tax treatment. Is this loss of Rs.10,000-Rs.1,800 = Rs.8,200 can be considered as STCG U/S 50 or is this business loss and also Please let me know the net block of asset value at the year end? Is Rs.25,000+Rs.8,200 = Rs. 33,200?
PLease advise the full implication of this issue.
suppose i have a hotel. ant income generated by selling food is taxed under income from business and professin. i buy an oven for my business . use it for 7 years and sold it . under which tax it is taxed?
I thing its under the head P.G.B.P.
PLEASE GIVE ANSWER OF MY QUERY
IF I SELL TWO LONG TERM CAPITAL ASSET OTHER THAN HOUSE AND PURCHASE A RESIDENTIAL HOUSE PROPERTY WHETHER I WILL BE ELEGIBLE DEDUCTION U/S 54F FOR CAPITAL GAIN AGAINST BOTH PROPERTIES WHICH I SOLD????
It was a depreciable asset.
Falls under’PGOBP’.
The sale price deductible from the wdv of the Block.
U can invest in only one house property u/s 54F.. And u have to invest the net sale consideration..
It is clearly stated in the definition of capital assets that whether the assets used in the business or not liable for capital gain except personal, movable assets.. So Oven also a capital asset.. And it is liable for short term capital gain because u may availed depreciation on it while calculating income from business..
U raised a good question… Normally it happens in the present days..
I think the solution will be…
If the indexed cost of acquisition of the house is 10lakhs… But the builder gave 8 lakhs as the compensation. Builder constructed 4 stores and retained 2 floors … So still u r owner for 2 floors… So the COA will be taken as proportionately… I mean to say… Amt received from the builder is the sale consideration and the cost of acquisition is deducted at a proportionate basis.. Here it is in 50:50 basis. So 50% of the cost of acquisition is taken while calculating capital gains…
Recently I have sold a Flat, purchased in 1988. This amount totally (investment & gain) is paid to my home loan account(pre-payment), which was taken 2 years back from PSU bank .What will be tax implication for me.Is it need to mention in my next IT return ? I am salaried employee in PSU. Thanx
Hi,
I have a query.. My father purchased a land for around 1Lac and with registraton 1.2Lac in the year 1998. Now he is planned to sell out the same and the value is Rs. 15.4 Lacs now. Now tell us will this considered to be a Capitalgain and attract 20% of Tax.
I have entered into an agreement for purchase of land and then for construction with a builder in March 2005. The builder was to deliver the flat by October 2008. His project got delayed. He had 23 towers to complete and he started delivering block by block since Sept. 2009. Though he has completed my residential block by 2010 end he has completed my flat in Oct. 2011 only and he hopes to handover this month. If i sell the flat at a rate higher than what i bought it will the capital gain be treated as Long term gain from house property as it is more than 3 years since the delivery was to take place and my payments have all been done ( except the deposits for utilities).
sir, if a person inherited some property like plot, resident house etc. then on sale of that proprty will that property comes under long term capital gain
Sir, iam planning to sell my ancestrial agricularal land, iam a non resident in the uk . i recieved the land as a gift (inhertitance) after my father died 5 years ago. What tax implications are their for me? and what is this 8km municiple ring or boundary should the land fall inside or out? rgards
For investing in Capital gain (54EC) bonds in Chennai, Please contact 9840288233