Article explains What incomes are charged to tax under the head Capital Gains, meaning of capital asset /long-term capital assets, What is long-term capital gain and short-term capital gain , Why capital gains are classified as short-term and long-term, How to compute long-term capital gain, benefit of indexation, Calculation of Capital Gain In respect of capital asset acquired before 1st April, 2001, What constitutes ‘transfer’,  capital gain in case of transfer of asset by way of gift / will, etc., capital gains exempt under section 10, Rates capital gains are charged to tax, benefit in respect of re-investment of capital gain in any other capital asset, Investment in Bonds to claim Capital Gain Exemption etc. 

As per Wikipedia A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realized on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price. Conversely, a capital loss arises if the proceeds from the sale of a capital asset are less than the purchase price. Capital gains may refer to “investment income” that arises in relation to real assets, such as property; financial assets, such as shares/stocks or bonds; and intangible assets.

Frequently Asked Questions on Taxation of Capital Gains in India

Q.1 What incomes are charged to tax under the head “Capital Gains”?

​Ans: Any profit or gain arising from transfer of a capital asset during the year is charged to tax under the head “Capital Gains”.​

Q.2 What is the meaning of capital asset?

Ans: ​Capital asset is defined to include:

a) Any kind of property held by an assessee, whether or not connected with business or profession of the assesse.

b) Any securities held by a FII which has invested in such securities in accordance with the regulations made under the SEBI Act, 1992.

However, the following items are excluded from the definition of “capital asset”:

  • Any stock-in-trade, consumable stores, or raw materials held by a person for the purpose of his business or profession.

E.g., Motor car for a motor car dealer or gold for a jewellery merchant, are their stock-in-trade and, hence, they are not capital assets for them.

  • Personal effects of a person, that is to say, movable property including wearing apparels (*) and furniture held for personal use, by a person or for use by any member of his family dependent on him.

(*) However, jewellery, archeological collections, drawings, paintings, sculptures, or any work of art are not treated as personal effects and, hence, are included in the definition of capital assets.

  • Agricultural Land in India, not being a land situated:

* Within jurisdiction of municipality, notified area committee, town area committee, cantonment board and which has a population of not less than 10,000;

* Within range of following distance measured aerially from the local limits of any municipality or cantonment board:

*​ not being more than 2 KMs, if population of such area is more than 10,000 but not exceeding 1 lakh;

* not being more than 6 KMs , if population of such area is more than 1 lakh but not exceeding 10 lakhs; or

* not being more than 8 KMs , if population of such area is more than 10 lakhs.

Population is to be considered according to the figures of last preceding census of which relevant figures have been published before the first day of the year.

  • 6½% Gold Bonds, 1977 or 7% Gold Bonds, 1980 or National Defence Gold Bonds, 1980 issued by the Central Government.
  • Special Bearer Bonds, 1991, issued by the Central Government
  • Gold Deposit Bonds issued under Gold Deposit Scheme, 1999.
  • Deposit certificates issued under the Gold Monetisation Scheme, 2015.​

Following points should be kept in mind :

  • The property being capital asset may or may not be connected with the business or profession of the taxpayer. g.Bus used to carry passenger by a person engaged in the business of passenger transport will be his  Capital asset.
  • Any securities held by a Foreign Institutional Investor which has invested in such securities in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992 will always be treated as capital asset, hence, such securities cannot be treated as stock-in-trade. ​

Q.3 What is the meaning of the term ‘long-term capital asset’?

​Ans: Any capital asset held by a person for a period of more than 36 months immediately preceding the date of its transfer will be treated as long-term capital asset.

However, in respect of certain assets like shares (equity or preference) which are listed in a recognised stock exchange in India, units of equity oriented mutual funds, listed securities like debentures and Government securities, Units of UTI and Zero Coupon Bonds, the period of holding to be considered is 12 months instead of 36 months.

In case of unlisted shares in a company, the period of holding to be considered is 24 months instead of 36 months.

With effect from Assessment Year 2018-19, the period of holding of immovable property (being land or building or both), shall be considered to be 24 months instead of 36 months.

Q.4 What is long-term capital gain and short-term capital gain?

Ans: ​​Gain arising on transfer of long-term capital asset is termed as long-term capital gain and gain arising on transfer of short-term capital asset is termed as short-term capital gain. However, there are a few exceptions to this rule, like gain on depreciable asset is always taxed as short-term capital gain.​​​

Q.5 Why capital gains are classified as short-term and long-term?

​​Ans: The taxability of capital gain depends on the nature of gain, i.e. whether short-term or long-term. Hence to determine the taxability, capital gains are classified into short-term capital gain and long-term capital gain. In other words, the tax rates for long-term capital gain and short-term capital gain are different. Similarly, computation provisions are different for long-term capital gains and short-term capital gains.​

Q.6 How to compute long-term capital gain?

​​​Ans: Long term capital gain arising on account of transfer of long-term capital asset will be computed as follows:

Particulars

Rs.
Full value of consideration (i.e., Sales consideration of asset) XXXXX
Less: Expenditure incurred wholly and exclusively in connection with transfer of capital asset (E.g., brokerage, commission,  etc.)

 

(XXXXX)

Net sale consideration XXXXX
Less: Indexed cost of acquisition (*) (XXXXX)
Less: Indexed cost of improvement, if any (*) (XXXXX)
Long-Term Capital Gain XXXXX

Indexed cost of acquisition is computed with the help of following formula :-

Cost of acquisition × Cost inflation index of the year of transfer of capital asset
Cost inflation index of the year of acquisition

Indexed cost of improvement is computed with the help of following formula :-

Cost of improvement × Cost inflation index of the year of transfer of capital asset
Cost inflation index of the year of improvement

Q.7 How to compute short-term capital gain?

​Ans: Short-term capital gain arising on account of transfer of short-term capital asset is computed as follows:

Particulars

Rs.
Full value of consideration (i.e., Sales value of the asset) XXXXX
Less: Expenditure incurred wholly and exclusively in connection with transfer of capital asset (E.g., brokerage, commission, etc.)

 

(XXXXX)

Net Sale Consideration XXXXX
Less: Cost of acquisition (i.e., the purchase price of the capital asset) (XXXXX)
Less: Cost of improvement (i.e., post purchase capital expenses incurred  on  addition/improvement to the capital asset)  

(XXXXX)

Short-Term Capital Gain XXXXX

Q.8 Is the benefit of indexation available while computing capital gain arising on transfer of short-term capital asset?

Ans: ​​​​Indexation is a process by which the cost of acquisition/improvement of a capital asset is adjusted against inflationary rise in the value of asset. The benefit of indexation is available only in case of long-term capital assets and is not available in case of short-term capital assets.​​

Q.9 In respect of capital asset acquired before 1st April, 2001 is there any special method to compute cost of acquisition?

​​​​Ans: Generally, cost of acquisition of a capital asset is the cost incurred in acquiring the capital asset. It includes the purchase consideration plus any expenditure incurred exclusively for acquiring the capital asset. However, in respect of capital asset acquired before 1st April, 2001, the cost of acquisition will be higher of the actual cost of acquisition of the asset or fair market value of the asset as on 1st April, 2001. This option is not available in the case of a depreciable asset.​

Q.10 If any undisclosed income [in the form of investment in capital asset] is declared under Income Declaration Scheme, 2016, then what should be the cost of acquisition of such capital asset?

​​​Ans: The fair market value of the asset as on 1st June, 2016 [which has been taken into account for the purpose of said declaration Scheme, 2016] shall be deemed as cost of acquisition of the asset. [This provision is applicable w.e.f. 1-4-2017]​

Q.11 As per the Income-tax Law, gain arising on transfer of capital asset is charged to tax under the head “Capital gains”. What constitutes ‘transfer’ as per Income-tax Law?

​Ans: Generally, transfer means sale, however, for the purpose of Income-tax Law “Transfer”, in relation to a capital asset, includes:

i. Sale, exchange or relinquishment of the asset;

ii. Extinguishment of any rights in relation to a capital asset;

iii. Compulsory acquisition of an asset;

iv. Conversion of capital asset into stock-in-trade;

v. Maturity or redemption of a zero coupon bond;

vi. Allowing possession of immovable properties to the buyer in part performance of the contract;

vii. Any transaction which has the effect of transferring an (or enabling the enjoyment of) immovable property; or

viii. Disposing of or parting with an asset or any interest therein or creating any interest in any asset in any manner whatsoever.

Q.12 What are the provisions relating to computation of capital gain in case of transfer of asset by way of gift, will, etc.?

Ans: Capital gain arises if a person transfers a capital asset. section 47 excludes various transactions from the definition of ‘transfer’. Thus, transactions covered under section 47 are not deemed as ‘transfer’ and, hence, these transactions will not give rise to any capital gain.  Transfer of capital asset by way of gift, will, etc., are few major transactions covered in section 47. Thus, if a person gifts his capital asset to any other person, then no capital gain will arise in the hands of the person making the gift (*).

If the person receiving the capital asset by way of gift, will, etc. subsequently transfers such asset, capital gain will arise in his hands. Special provisions are designed to compute capital gains in the hands of the person receiving the asset by way of gift, will, etc. In such a case, the cost of acquisition of the capital asset will be the cost of acquisition to the previous owner and the period of holding of the capital asset will be computed from the date of acquisition of the capital asset by the previous owner.

(*) As regards the taxability of gift in the hands of person receiving the gift, separate provisions are designed under section 56​​. ​

Q.13 I have sold a house which had been purchased by me 5 years ago. Am I required to pay any tax on the profit earned by me on account of such sale?

Ans: ​​​​​House sold by you is a long-term capital asset. Any gain arising on transfer of capital asset is charged to tax under the head “Capital Gains”. Income-tax Law has prescribed the method of computing capital gain arising on account of sale of capital assets. Thus, to check the taxability in your case, you have to compute capital gain by following the rules laid down in this regard, and if the result is gain, then the same will be liable to tax.​

Q.14 Are any capital gains exempt under section 10?

​Ans: Section 10 provides list of incomes which are exempt from tax amongst those the major exemptions relating to capital gain are as follows:

Section 10(33): Long-term or short-term capital gain arising on transfer of units of Unit Scheme, 1964 (US 64) referred to in Schedule I to the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002) and where the transfer of such asset takes place on or after 1-4-2002.

Section 10(37) : An individual or Hindu Undivided Family (HUF) can claim exemption in respect of capital gain arising from the transfer of agricultural land situated in an urban area by way of compulsory acquisition under any law or a consideration for such transfer is determined or approved by the Central Government or the Reserve Bank of India. This exemption is available if the land was used by the taxpayer (or by his parents in the case of an individual) for agricultural purposes for a period of 2 years immediately preceding the date of its transfer. Such income has arisen from the compensation or consideration for such transfer received by an assessee on or after the 1st day of April, 2004.

Section 10(37A): An individual or Hindu Undivided Family (HUF) can claim exemption in respect of capital gain arising from the transfer of land or building or both under Land Pooling Scheme under the Andhra Pradesh Capital City Land Pooling Scheme (Formulation and Implementation) Rules, 2015 made under the provisions of the Andhra Pradesh Capital Region Development Authority Act, 2014 (Andhra Pradesh Act 11 of 2014) and the rules, regulations and Schemes made under the said Act. This exemption is available if an individual or HUF was owner of such land or building as on 02-06-2014.

Q.15 At what rates capital gains are charged to tax?

Ans: ​​​​For provisions in this regard check tutorials on “Tax on Short-Term Cap​ital Gains and Tax on Long-Term Capital Gains”.​​

Q.16 Is there any benefit available in respect of re-investment of capital gain in any other capital asset?

​​​​Ans: A taxpayer can claim exemption from certain capital gains by re-investing the amount of capital gain into specified asset. The following table highlights the assets in respect of which the benefit of re-investment is available:

Section under which bene fit is available

Eligible Assessee

 

Gain eligible for claiming exemption Asset in which the capital gain is to be re-invested to claim exemption
section 54 Individual/HUF Long-term capital gain arising on transfer of residential house property. Gain to be re-invested in purchase or construction of one residential house property in India.
However, w.e.f., Assessment Year 2020-21, an assessee can make investment in two residential house property in India. The option of making investment in two residential house is available only if the amount of long-term capital gain doesn’t exceed Rs. 2 crore. Further, the benefit of making investment in two residential houses can be availed once in a lifetime.
section 54B Individual/HUF Long-term or short-term capital gain arising on transfer of agricultural land which was used by individual or his parents or HUF for agriculture purposes for atleast 2 years immediately prior to transfer. Gain to be re-invested in purchase of agricultural land (may be in rural arear or urban area).
section 54EC Any person Long term capital gain arising on transfer of land or building or both . Gain to be re-invested in purchase of bonds specified under section 54EC.
Section 54EE Any person Long-term capital gain arising on transfer of any capital asset. Gain to be re-invested in long-term specified assets to be notified by the Central Government to finance start-ups.
section 54F Individual/HUF Long-term capital gain arising on transfer of any capital asset other than residential house property, provided on the date of transfer the taxpayer does not more than one residential house property from the assessment year 2001-02 (except new house property) Net sale consideration to be re-invested in purchase or construction of only one residential house property in India.
section 54D Any person Long-term or Short-term capital gain arising on transfer of land or building forming part of an industrial undertaking which is compulsorily acquired by Government and was used for industrial purpose for a period of 2 years prior to its acquisition. Gain to be re-invested to acquire land or building for industrial purposes.
section 54G Any person Long term or Short term capital gain arising on transfer of land, building, plant or machinery in order to shift an industrial undertaking from urban area to rural area. Gain to be re-invested to acquire land, building, plant or machinery in order to shift an industrial undertaking to a rural area.
section 54GA Any person Long term or short term capital gain arising on transfer of land, building, plant or machinery in order to shift an industrial undertaking from urban area to any Special Economic Zone. Gain to be re-invested to acquire land, building, plant or machinery in order to shift an industrial undertaking to any Special Economic Zone.
section 54GB Individual/HUF Long-term capital gain arising on transfer of residential property (a house or a plot of land). The transfer should take place during 1st April, 2012 and 31st March 2017. However, in case of investment in “eligible start-up”, the residential property can be transferred upto 31st march 2021​. The net sale consideration should be utilised for subscription in equity shares of an “eligible company”.   W.e.f. April 1, 2017, eligible start-up is also included in definition of “eligible company” .

In order to claim the exemption on account of re-investment in various situations as discussed above, other conditions specified in the respective sections should also be satisfied and the re-investment should be made within the period specified in the respective sections.

Q.17 Are there any bonds in which I can invest my capital gains to claim tax relief?

​Ans: As per section 54EC –  An assessee can claim tax relief by investing the amount of long-term capital gain arising from:

a) any long term capital asset  (upto A.Y 2018-19)

b) long term capital asset being land or building or both  (From A.Y 2019-20)

in the specified bonds as follows:

a) Bond redeemable after 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) issued by National Highways Authority of India (NHAI) or

b) Bond redeemable after 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) issued by Rural Electrification Corporation Limited (REC) or

c) Bond redeemable after 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) issued on or after 15th June 2017 by Power Finance Corporation Limited or

d) Bond redeemable after 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) issued on or after 08th August 2017 by Indian Railway Finance Corporation Limited or

e) Bond redeemable after 5 years from A.Y 2019-20 (3 years for A.Y 2018-19) issued by any other authority but notified by Central Government [Applicable from A.Y 2018-2019]

within a period of 6 months from the date of transfer of capital asset and such bonds should not be redeemed before 5 years from A.Y 2019-20 (3 years upto A.Y 2018-19) from the date of their acquisition.

This benefit cannot be availed in respect of short-term capital gain.

Maximum amount of investment in specified bonds cannot exceeds Rs. 50,00,000. Thus, deduction under section 54EC cannot be claimed for more than Rs. 50,00,000.

Q.18 ​What is the meaning of stamp duty value and what is its relevance while computing capital gain in case of transfer of capital asset, being land or building or both?

Ans: “Stamp duty value means the value adopted or assessed or assessable by any authority of a State Government for the purpose of payment of stamp duty. As per section 50C, while computing capital gain arising on transfer of land or building or both, if the actual sale consideration on transfer of such land and/or building is less than the stamp duty value, then the stamp duty value will be taken as full value of consideration, i.e., as deemed selling price and capital gain will be computed accordingly.”  (not applicable from A.Y 2019-20)

Taxation of Capital Gain in India - FAQs

From assessment year 2019-20 actual sales consideration will be treated as full value consideration if stamp duty value does not exceeds 105% of actual sales consideration. In case where stamp duty value exceeds 105%of actual sales consideration, then stamp duty value will be considered as full value of consideration for computing capital gain.

Q.19 Whether interest received on amount deposited in capital gain account under capital gain account scheme is taxable?

Ans: Capital Gains Account Scheme is a scheme to facilitate the taxpayer.

  • If taxpayer could not invest the capital gains

– to acquire new asset

– before due date of furnishing of return of income

– then the capital gains amount can be deposited

– before due date for furnishing of return of income

– in a special bank account

– maintained in any branch of a nationalized bank

  • Interest earned on Capital Gains Account is chargeable to tax under the head Income from Other Sources
  • Interest earned on Capital Gain Account is charged to tax in the year it accrues and is credited to the capital gain account of the assessee.

Q.20 Whether profit earned from sale of land or building or both chargeable to capital gain tax?

Ans:

  • Profits and gains earned from sale of land or building or both are chargeable to tax under the head “Capital Gain”
  • In the case of sale of land or building or both, the value determined by stamp duty authorities will be considered as full value of consideration if the following conditions are satisfied –

a) The asset transferred is land or building or both.

b) Sale Consideration is less than the value as determined by the stamp duty authority for the payment of stamp duty.

c) Stamp Duty value exceeds 105% of the consideration received or receivable on account of transfer. [Applicable from A.Y 2019-20].

  • For the purpose of valuation, stamp duty valuation shall be considered on the date of registration of the property.

Exception – Where the date of agreement fixing the consideration and date of registration are not same, then the stamp duty value will be considered on the date of agreement for such transfer.

The above exception will be applicable if –

a) Full consideration or part there-of is received by an account payee cheque/draft or by use of electronic clearing system through a bank account. Or through such other electronic mode as may be ​prescribed.​

b) Such amount is received before the date of agreement.

c)  It is applicable from the A.Y 2017-2018.

Q.21 Which Form is to be filed for withdrawal from Capital Gain Account?

Ans: As per Rule 9 of Capital Gain Accounts Scheme, 1988, the procedure of withdrawal from Capital Gain Account Scheme is as follows:

Withdrawal from Account-A

Amount can be withdrawn from Account-A at any time after making initial subscription by depositing Form C along with the pass book in the deposit office.

For any withdrawal from Account-A, other than initial withdrawal, a depositor needs to apply in Form D in duplicate. The details regarding the manner and extent of utilization of the amount of immediately preceeding withdrawal are as follows:-

Withdrawal from Account -B

A depositor intending to withdraw the amount from Account-B, shall first transfer the amount in his Account-B to Account-A and withdraw the amount in the same manner as is specified for Account-A.  Manner of transfer and conversion of deposit account are prescribed under the Rule 7 of Capital Gain Accounts Scheme,1988.

Depositor having the deposit account B may apply in Form-B along with deposit receipts and details of deposit account A for transfer of the amount standing to credit in deposit account B. In case depositor has not opened deposit account A, depositor has also to request for opening deposit account A along with Form B.

Q.22 I want to close my capital gain account. The capital gain amount is already disbursed and only interest is lying in account. The branch manager asked for Form G with AO’s endorsement on it. How to get it? Please advise procedure?

​​​Ans: 1. As per Rule 13 of Capital Gain Account Scheme 1988, in case of closure of capital gain account, a depositor (other than an eligible company as referred to in section 54GB applicable w.e.f 25-10-2012) is required to file an application in Form-G along with the passbook of account-A or deposit receipt of account-B, as the case may be, to the deposit office with the prior approval of the Assessing Officer who has jurisdiction over the depositor.

If a depositor is an eligible company as referred to in section 54GB, then for closure of capital gain account, it shall be required to make a joint application in Form G along with the passbook of account-A or deposit receipt of account-B, as the case may be, to the deposit office signed by the eligible assessee as referred to in section 54GB with the prior approval of the Assessing Officer having jurisdiction over the eligible assessee as referred to in section 54GB.

Deposit office shall make the payment of the amount in the account of depositor including the amount of interest accrued by crediting such amount to any bank account of the depositor.

2. In case of deceased depositor where nomination is made, a nominee may file an application for the closure of account in Form-H along with the passbook of account-A or deposit receipt of account-B, as the case may be, to the deposit office with the prior approval of jurisdictional Assessing Officer of the deceased depositor. Deposit office shall make the payment of the amount in the account of the deceased depositor, including the amount of interest accrued by crediting such amount to any bank account of the nominee.

3. In case of deceased depositor where nomination is not made, a legal heir may file an application for the closure of account in Form-H along with the passbook of account-A or deposit receipt of account-B, as the case may be, to the deposit office with the prior approval of jurisdictional Assessing Officer of the deceased depositor.

If there are more than one legal heir of the deceased depositor, the legal heir making the claim individually can do so by providing the letter of authorization from other legal heirs in his favour.

The Assessing Officer before granting the approval for the closure of account shall obtain from the legal heir a succession certificate issued under Part V of the Indian Succession Act, 1925, or a probate of the will of the deceased depositor, or letter of administration to the estate of the deceased, in case there is no will in order to verify the claim of such legal heir to the account of the deceased depositor.

Deposit office shall make the payment of the amount in the account of the deceased depositor, including the amount of interest accrued by crediting such amount to any bank account of the nominee.

[As amended by Finance Act, 2022]

(Source- Income Tax India Website , Republished with amendments)

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156 Comments

  1. M .S.Siva Rama Prasad. says:

    Sir,l request to clarify, whether l can get exemption on on capital gains on on sale of two plots in a financial year and in vest to purchase of a flat and a house plot whare the total cost of sale is less than 2crores.

  2. Milind Deshpande says:

    Deed of property sale happened on 26 March 22. Money reflected in account on 29 March 22. Whether penalty need to be paid if advance tax is paid in April 22.

  3. Mudit says:

    I have sold a commercial shop for 70Lakhs.
    The plot was bought in year 2005-06 for 6,80,000+Stamp duty and then shop was constructed on the plot in same year.
    At that point of time almost all the payments for construction were made in cash. Other maintainace works were carried out in subsequent years as well.
    How to calculate maintainence cost incurred for the shop.

  4. Sunil Bajaj says:

    Sir i bought residential plot in June 2018. This was exchanged by the builder in feb.2020 by indicating the same cheque numbers. Can i save tax if I sell the same

  5. Dinesh G Mahabal says:

    I have enterned in to agreement for purchase of a flat at Vadodara Gujarat. I own a tenament at Vadodara which i wish to sale but the deal is not through as yet. The payment to the saler of the flat -which i have purchased has to be done with a Loan from Bank. What would the Capital Gain Tax implications if I settle the bank loan out of payment done to me by proposed purchaser of the tenement .Request guidance. Thanks in advance.

  6. Ramchandra Himatlal Joshi says:

    Which date is to be considered for date of acquisition ? The date of booking New flat or the date of sale deed executed.
    Please let me know the period within which one should invest amount of capital gains on sale of property to buy new property.
    Again if I purchase New property first by Bank loan and sale existing property later,what rules apply? Am I eligible for investing in Govt Bonds to claim exemption ?

  7. vkgupta says:

    I purchased a skeleton house in the year and 1995 and connstructed the house during the period 2001-2004 with the Housing loan from my employer Govt. co. and from govt Banks. Constructions bill were not kept securely. House sold in 2017. Income tax Department asking the proper bills to ascertain tthe value of sold house.
    I hope ITD should either rely upon the govt agencies home Loan amount as cost of the house of as per the valuation done by the new purchaser as cost of the house sold

  8. Dilip Bhatkhande says:

    Sir,
    Would a house property built on a leasehold TRUST plot of land 60+ years ago, sold after converting land from leasehold to freehold now before sale, be treated as long term sale as a whole unit
    OR only the house property be treated as long term and the
    land sale treated as short term?

  9. Dilip Bhatkhande says:

    Sir,
    Would a house property built on a leasehold TRUST plot of land 60+ years ago, sold after converting land from leasehold to freehold now before sale, be treated as long term sale as a whole unit
    OR only the house property be treated as long term and the
    land sale treated as short term?
    What will be the Income Tax authority approach be in your
    opinion?

  10. PANKAJ VAISHYA says:

    if a house purchased from uncle 20 years ago and agreement done amount paid and shown in books of accounts but registry not done till date if we want and agree for registry than stamp duty will be paid on current registrar value than for capital gain purpose sale value is applicable or not and taxable in seller as well as purchaser hand

  11. T. Venkatasubramanian says:

    Can you pl let me know whether investments started in 2013 n completed in 2017 on a flat will be treated as Long term though the possession of flat was handed over only on 27.1.2020 due to delay in completion of that big project. Whether indexation claimed on that investments?

  12. Archana says:

    Paid stamp duty and received part amount in March 2021 and agreement registered in April 2021 and full and final amount received in April 2021. What is the financial year to be considered for capital gain

  13. Umang says:

    Hello,
    I purchased new house on 18 June 2019 and wanted to sell my existing house within one year but couldn’t do to corona. Finally sold Nov 4 2020. Is there extension granted in such cases ? I had some capital gains.

    Thanks

  14. Raj Kumar Garg says:

    I purchased a residential plot for rs. 11,000/- on 01/09/1989 and spent rs. 4,800/- as expenditure of purchase and little improvement at the same time.
    Then again I spent rs. 29000/- in the financial year 2004-05 for its improvement.
    Now in the financial year 2021-22 (on 21/06/2021) I sold the same plot for rs. 2,94,000/- and spent rs. 41,400/- for getting NOC and commission etc.
    Please let me know what is the LTCG and what is the LTCG tax effect.
    Thanks.
    RAJ KUMAR GARG
    KAITHAL.( Haryana)

  15. Manish says:

    Have sold my house. I received 10% advance in March 2021 and balance 90% at the time of registration which is April 2021. Please advise whether I have to show my 100% income for Income tax purpose either FY 2020-21 or 2021-22.

  16. Madeswaran says:

    I sold one land which i got as a gift. I plan to buy a land or house. In this, i like to know what is the time period to buy another property without paying tax?

  17. Diwakar jain says:

    Hello Sir
    My self Diwakar jain and I am a final year Law student.
    Sir I want to ask a question about Capital Gain. The facts of the case are as follows:
    We live in an ancestral house which was registered in the name of my grandfather. My grandfather left for his Heavenly Abode in 2008. Till today the house stands registered in his name as we had not made any efforts to transfer it in the name of my father.
    Now we are planning to purchase a new house on the name of my father. Also after completing all the formalities our ancestral house was transferred on my father’s name on 22.04.2021 i.e in financial year 2021-22.
    Sir Now we are planning to sale our ancestral house and the proceeds of such will be utilized in the purchase of our new house.
    Sir My question is while filing Income Tax return for AY 2022-23 what will be the date of Acquisition and cost of acquisition of ancestral house should be taken to compute Capital Gain.
    It is here mentionable that the transfer of ancestral house and the sale of ancestral house both are in same year i.e FY 2021-22.
    Will it be a Long term capital Gain or Short Term Capital Gain?
    Kindly reply with supported legal provision.
    Regards
    Diwakar Jain

    1. Vimal Dugaya says:

      Sir
      I have sold my house property in July 2019 and entire amount has been deposited in capital gain account but capital gain arises only 466000. Now I don’t want to take exemption under capital gain scheme due to changed circumstances. Now how to calculate tax to be deposited and interest also to be paid by me.

  18. Vikrant says:

    Hi,
    I inherited a commercial land in 2004 and ran commercial business out of that place for 14 years. in 2018 i went into joint venture with a builder. wherein builder will built a building with 15 shops on that land and then we jointly sell these shops post RERA registration. Please guide tax implication on sale of these shops. Will it be Long term / Short term capital gain tax ??

  19. Girish says:

    Hi

    An aged person known to me is a widower and lives alone in a flat he owns, He wants to dispose off the flat as he does not have any source of income,
    If he sells the flat, will he have to pay Capital Gains tax in case he does not buy a new house?
    What is the tax he will have to pay ?
    Please advise

    Regards,
    Girish

  20. Raghunath says:

    My friend who is 72 years now, sold his flat for Rs.33 lakhs. The Purchase price was 3 lakhs in 1989. He do not want to reinvest in house properties .He want to invest in monthly income scheme /investment of mutual fund or bond and decided to stay in old age home. No other income except money for expenses from children.(five thousand per month)

  21. V D Bhawar says:

    Need your advice.
    On capital gain.

    We have sold one of property in mumbai in dec 2018.

    Property gain is 40lakhs on that transaction.
    Which we have kept in property gain account in idbi.
    Now in how much time i will hv to invest that amount in new property.

    If it is two years.
    Then that two years period will be from date of registartion of sold property.
    Or date of payment received from that deal.
    As sell agreement was registered in Dec 2018.
    But full deal was completetd in March 2019.
    We have got amount in account in march 2019

  22. Raju says:

    I sold a Residential Property under HUF, with me as Karta, in Feb’20. I am planning to invest the long term capital gain of Rs.25 lakhs in a new Residential Property of Rs.50 lakhs. For new property a registered sale agreement is concluded in Apr’19, in my name. Sale Deed may go beyond Feb’22. I am planning to hold 50% of the new property under my individual capacity and 50% under the capacity of karta of HUF and accordingly file returns. Seeking review of the process and advice.

  23. Mohan Deshpande says:

    i have sold my share of pvt ltd company from that amount i am purchasing housing property while purchasing i am fist holder and my son is 2nd holder in this case can i get capital gain benefit

  24. CA. Dixita Swami says:

    My Client has sold agriculture land which was inherited. They sale consideration is 15 cr. He has acquired valuation report for 2001. According to it, there is 4 figures mentioned. Agriculture land 22 laks, non Agriculture land 22.50 lakh, residential 3.93 cr, commercial 5.73 cr. The documents are still pending. The buyer has converted it no NA. Now he is going to make documents which minimize the gain. Pls suggest which cost shuold taken or how to make documents, so the cost will become high and gain would became minimize.

  25. Ram says:

    While working out the net short term capital gains on equity shares can you please clarify what all expenditures are deductible out of ‘Brokerage, Service tax on brokerage, Securities transaction tax (STT), Stamp duty, other charges’?

  26. Harsh says:

    Can a person sell one plot and his only one residential house in the same year and invest into 2 new houses and exempt from capital gain taxes on both the sale.? Please reply.

  27. Ankur says:

    After withdrawing and using entire amount from capital gain account, is it necessary to close this account or can we keep it as it is with 0 balance forever? I am asking this because it requires income tax officer letter/signature as well, which I would want to avoid if possible.

  28. eirlindia says:

    Sir i sold my residential plot in FY 2018-19, Rs. 1.10 Cr., allotted by Huda Gurgaon in 2010 and as per calculation total LTCG is payable is 72 Lakh and i have deposited the same in long term capital gain account in SBIi. My query is whether should I deposit the entire sale consideration amount in the capital gain account or payable LTCG amount i.e. 72 Lakh only ? Kindly guide. Regards.

  29. Malathi Murali says:

    My father purchased apartment in Apr 1997 for 4.8 Lacs and sold as GIFT to me in Aug 2012 for Rs 24 Lacs. I remodelled the aparment spending 16 Lacs in Jan 2012 (Before Occupation).

    If I sell apartment in Dec 2019, what would be my Capital Gains Liability? Or upto what Price I can sell the Apartment Officially without Capital Gains Liability.

    I am a retired prof from University with less than 6 Lacs annual income

  30. Pradeep says:

    If an Assessee makes an Long Term Capital gain of Rs.80Lakhs, can she/he avail all the benefits of investment in specific Bonds upto Rs.50Lakhs and balance to be deposited in Capital Gain Account Scheme???
    If there any other combination of investment the assessee can make against the Capital Gain.

  31. nirmal says:

    The information does not give clue to selling a property after improvement.
    I want to know capital gain calculation on the following situation:
    Plot of residential land purchased in urban area Panipat, Haryana in 1995 for Rs 25 lakhs. Built four floors in 2018-19 spending Rs 125 lakhs. Selling all floors for 700 lakhs in 2019.

  32. vswami says:

    OFFHAND

    THE write-up says, – “(Source- Income Tax India Website , Republished with amendments)

    As selected (:

    ” Q.9 In respect of capital asset acquired before 1st April, 2001 is there any special method to compute cost of acquisition?

    Ans: Generally, cost of acquisition of a capital asset is the cost incurred in acquiring the capital asset. It includes the purchase consideration plus any expenditure incurred exclusively for acquiring the capital asset. However, in respect of capital asset acquired before 1st April, 2001, the cost of acquisition will be higher of the actual cost of acquisition of the asset or fair market value of the asset as on 1st April, 2001. …..”

    Prima facie, -pending a detailed scrutiny,- the given answer , appears to have been given, as before, in a simplistic manner ; that is without any amendment , as called for, -also pointed ot even earlier., – again bypassing and without any regard to the viewpoints shared on the attendant complicity in computing the ‘cost of acquisition’ of a capital asset acquired before the date of April 1, 2001 entitled to be indexed and suitably scaled up ifor inflation.

    Refer, and mindfully go through the contents of the Article published and displayed on the website of TAXMAN :
    [2018] 91 taxmann.com 39 (Article) – V. SWAMINATHAN
    Opinion : Computation of Capital Gains for FY 2017-18

    courtesy

  33. Nagarjuna says:

    Is there any provision to file return in respect of long term capital gains pertaining to land and building, after the capital gain amounted is invested in residential accommodation , after completion of the residential building and sale deed is registered.

  34. satish kapoor says:

    My wife purchased a plot at cost of Rs15000/- in 1988.
    In 2017, we entered into agreement for constructing 4 stotey house out of which one floor + Rs 30 lacs to be given to the builder towards cost of building. house is partially ready, completion certificate obtained from Municipality.
    Due to some reasons we want to sell entire house floor wise. One floor of builder is sold at Rs 60 lacs. So rest floors may fetch 180-190 lacs.

    What will be tax liability if we sell one floor only
    If sell entire floors and buy bigger plot ?

  35. C S Murthy says:

    My Fatherin law was allotted some 467 yds land in 1982 in a govt employees co op soceity. for Rs 7305-
    Later in in 1991-92 he gave for development for Flats The builder constructed 10 Flats and supposed give one Flat plus 1,90,000- after sale of another Flat.out of this paid advance 25000- and after sale of other 8 Flats in 80% finished condition he vanished leaving two Flats for Land owner. Both Flats are brought to use by finshing and interors and were let out from 1993. After demise of both parents in laws in 2010,2013,recently my wifes brother Partioned the property and allotted
    one Flat to my wife in 2016 at declared value of 11Lakhs. which is sold in June 2017 for 21.50Lakhs but the buyed tricked and got registration done at 24.50 though paid only 21.50.
    He had taken 3L more to get new interiors done.
    we want to Pay capital gains tax. we are unable to
    arrive at the gains. can we take 2001 value from Department and Index it?

  36. Ankit Shah says:

    Hi,
    I have this residential property in Kandivali which i bought in 2009 for 50lac. I am selling it now at 1.8cr. With indexation benifit my long term capital gain comes to approximately 1.1cr.
    I gifted property to wife (100%share) in June 2017 duly registered.
    My wife wants to sell that property now and buy new under construction residential property worth Rs3cr.
    1) Is she eligible for long term capital gain?
    2) Should she claim Sec 54 benefit or shud i claim it due to clubbing provision as per Sec 64?
    3) Who should accept the sale proceeds of the flat she or me or should we split it as she taking the capital with indexation benifit and me taking long term capital gain in my book?

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