Summary (Approx. 300 Words):
A capital asset refers to any property owned by a taxpayer, whether or not related to business or profession, and includes securities, certain insurance policies, and artworks. However, stock-in-trade, personal effects (excluding jewellery, art, etc.), and specified government bonds are excluded. Capital assets are categorized as long-term or short-term based on the holding period—assets held for over 24 months (36 months before July 23, 2024) generally qualify as long-term. Gains from the transfer of these assets are taxed as capital gains, with distinct rates and computation methods for short-term and long-term categories. Long-term capital gains may avail indexation benefits to adjust costs for inflation. In cases where assets were acquired before April 1, 2001, the fair market value as of that date may be considered for cost computation.
Capital gains are taxable when a “transfer” occurs, including sale, exchange, or conversion into stock-in-trade. Transfers via gift or will are not taxable, though subsequent transfers by the recipient are. Various exemptions apply under sections 54 to 54GB for reinvestment in specified assets such as residential property, agricultural land, bonds (e.g., NHAI, REC, HUDCO), or industrial assets. Stamp duty value rules ensure fair computation where sale consideration is lower than the government-assessed value. Interest on capital gain accounts is taxable as “Income from Other Sources.” Withdrawal or closure of such accounts requires prescribed forms (C, D, G, or H) and approval from the Assessing Officer. These provisions collectively govern the taxation, exemption, and procedural aspects of capital gains under Indian Income Tax Law.
Q.1 What is the meaning of capital asset?
Ans Capital asset is defined to include:
a) Property of any kind, held by an assessee, whether or not connected with his business or profession;
b) Any securities held by a FII which has invested in such securities in accordance with the SEBI Regulations;
c) Any securities held by a Category I or Category II AIF which has invested in such securities in accordance with the SEBI or IFSC Regulations;
d) Any unit linked insurance policy to which exemption under Section 10(10D)does not apply.
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.2 What is the meaning of the term ‘long-term capital asset’?
Ans Long-term capital asset means a capital asset which is not a short-term capital asset.
A short-term capital asset means any capital asset held by a person for a period of not more than:
a. 36 months (if a capital asset is transferred before July 23, 2024) or
b. 24 months (If a capital asset is transferred on or after July 23, 2024), immediately preceding the date of its transfer will be a short-term capital asset.
Exceptions:
(a) Applicable upto July 22, 2024
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.
Further, the period of holding of immovable property (being land or building or both), shall be considered to be 24 months instead of 36 months.
(b) Applicable from July 23, 2024
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 2
Q.3 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.4 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.5 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:
(A) If transfer took place before 23-07-2024
| 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
(B) If transfer took place on or after 23-07-2024
| 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: cost of improvement, if any | (XXXXX) |
| Long-Term Capital Gain | XXXXX |
Q.6 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.7 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.
Note: Indexation benefit on long-term capital assets is available only if transfer took place before 23-07-2024
Q.8 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.9 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.10 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.11 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.12 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.13 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.14 At what rates capital gains are charged to tax?
Ans For provisions in this regard check tutorials on “Tax on Short-Term Capital Gains and Tax on Long-Term Capital Gains”.
Q.15 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, 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. Further, if the cost of new asset exceeds Rs. 10 crore, the excess amount shall be ignored and Rs. 10 crore shall be taken into consideration. |
| 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 at least 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. Note: if the cost of new asset exceeds Rs. 10 crore, the excess amount shall be ignored and Rs. 10 crore shall be taken into consideration. |
| 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 2022. | 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.16 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 long term capital asset being land or building or both 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]
f) Bonds redeemable after 5 years and issued on or after 1st day of April, 2025 by ‘Housing and Urban Development Corporation Limited (HUDCO)’
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.17 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)
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.18 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.19 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.20 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.21 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 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 54GBapplicable 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 insection 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.
1. 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.
2. 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.
I have opened an cags account when I sold land . And deposited the full amount in it , now as seeing a downtrend in property I have postponed my plan to buy house for over 3 years . I have plan to shift the amount to capital gain bond as it’s not yet 6 months up I have sold the land , and close the cags need urgent help as last date of filing is on 31st
I have opened an capital gain account when I sold land . And deposited the full amount in it , now as seeing a downtrend in property I have postponed my plan to buy house for over 3 years . I have plan to shift the amount to capital gain bond as it’s not yet 6 months up I have sold the land , and close the cags
Hello,
We had invested in a IIFL Housing finance bonds or NCD’s. What is the tax treatment for the interest income which got credited to my savings bank acc every month?
Thanks.
sir,Land ( TAXABLE)acquired compulsory by govt,then for an employee will the compensation amount and salary added together for tax? e.g. compensation is 700000 and salary is 500000. total 1200000 is taxable or both the amount will be shown separately. Then form no. tax deduction .will be how much . (minus exemption 150000)..sanak
sir,Land ( TAXABLE)acquired compulsory by govt,then for an employee will the compensation amount and salary added together for tax? e.g. compensation is 700000 and salary is 500000. total 1200000 is taxable or both the amount will be shown separately. Then form no. tax deduction .will be how much . (minus exemption 150000)
Clarification required please:
After acquiring property (purchased 45 years ago by my parent) through family settlement as a gift, i.e., after the property is transferred to my name (daughter) and if I sell it and use the sale proceeds to pay of my housing loan will Capital Gain tax be applicable on the sale proceeds of my parent’s property since transferred to my name?
Hi, If one sells a piece of LAND (bought well over 3 years ago) and buys HOUSE out of the proceeds which becomes the primary dwelling (first time home buyer), will there be any tax implication on the capital gains? or there won’t be tax outgo as it is invested immediately into a house.
I have purchase my flat in 1998 at 8 lacs and I would like to sell it out by which I will get 80 lacs in 2015-16.
Now in 2009 I have purchase one more flat by taking loan of 1crore. If I would like to repay these loan then will it be huge long term capital gain tax I have to bear or not?
Please advise.
Hello,
Very informative Article.
My father received 18 lacs in 2015 as the proceeds for the land acquired by the Government in 2004 at his hometown. The land was purchased by his grandfather before 1981 which was initially used for agriculture but was not used for any purpose for many years before acquisition. At the time of acquisition in 2004 the land was in the name of my grandfather who later died in 2005. Since my father is the only legal heir of my grandfather he received the payment for the acquisition of land. Can you please clarify the following points.
1. What is the income tax implication to him. He is a salaried employee.
2. The cost of acquisition of the land is not known. How to know the value of the land at 1981 to be used for indexation.
Thanks.
My share transaction for the fin year 2013-14 & 2014-15 is around 2 crore(speculation loss+short term loss), my total income is under taxable.
now i want to file the return for the periods.
Is there any problem for so much high transaction showing in return or any audit problem.
Please guide me urgently.
sir, my father bought a plot of 3000 sq.ft. and built a two storied house (1100sq ft each story) on 1970 at Midnapur , West Bengal , India. In December 2011 he made a POA as owner with a developer to develop that property and made a registered agreement on july 2012 by which a G+4 building will be built and of 8 flats(1120 sq ft super built each) and 4 garages, my father(owner) will get 3 flats (two on same floor and one on top floor) and 2 garages. But before hand over of flats and garages my father passes away on 05.01.2015. I am the only heir of him. my question is …
1) as only heir is their any capital gain tax charged on me on whole?
2) is there any CGT on those same floored flats which i will reside?
3} if i sell the third flat do I pay CGT?
4) if so, can i be indexed from 1981-82?
sir, if u pls advise, I will be ever grateful.
Kingsuk.
I had purchased 2 residential flats from inheritance residential property. One was in new construction in own name and one co-owner in very old building without basic renovation.
I have a balance amount of 10lacs in capital gain bond (3 years are not yet up). Can I show this amount of 10L as renovation and architecture costs, terrace waterproofing/full renovation of flat done in my IT returns next year? Will I get such exemption.
appreciate your kind response.
Best regards,
Hi,
We are three of friends together purchased a land three years back but the land register in my name only we have purchased 8,25,000 now we are planning to sell the land for13,50,000 in this case whether iam salaried employes in organasation tax deducted in my salary now i am in 20% Tax Slab wether i need to pay tax and how much it will come. Based on your input iam planning to discusss with my friends for sharing the Income tax.
Thanks
Regards
perumal
i jhave purchased a land in 2007 for Rs 120000 and constructed a house with various loans upto 2012 amounting Rs 1880000
Now i am selling my house @ 6000000 what is my tax liabilty? wether i have to pay 20% tax on my liabilty of 2000000 and remaining 40 lac can invest in capital gain account
Is transfer of depriciable asset always short term?
Sir,
Kindly clarify,
My wife sold flat in March 2013 and invested that long term capital gain amount only, in authorized nationalise bank in the Long term capital gain in F.D. on Sept 2013.
1. When shall she purchase a new flat and what should be possession date of new flat ?
2. She is also a nominal joint a/c. holder in one of my flat booked in January 2011 and agreement made in Sept. 2011 in my name ( she is a joint holder, but I did not paid any amount to builder from her a/c. till date )
3) Possession of my flat will be received in March 2016 ( physical possession for furniture with architect certificate ) and completion certificate will get only after 9 months or so.
Please advise, what shall I do.
Amitabh Agarwal
Dear Sir,
Please tell me one thing that any SIP (MUTUAL FUND) INCOME IS TAXABLE
If SIP is only for one year, should it calculated as STCG?
I have two querries as regards to LTCG:
1). After investing the gain amount in Capital Bonds for three years, can the amount be utilized for personal use after the term. Will then the tax be applicable.
2). I have sold the property which was inherited by me and the amount of gain on it is Rs. 20 lacs. I want to construct a house for which i have scouted a land worth Rs.23 lacs. Can i invest this amount for purchasing the land and the remaining amount towards construction will be met from my own sources. Can the tax be saved.
Regards.
A.K.Banerjee
My Grand Father has a residential house bought in 1972 and has two sons,one daughter.
We recently sold that property, where in the sale deed the 3 children of my grand father and 6 grand children signed. We the 6 grand children and daughther of my grand father didnt get money because we dont want.
So the amount received due to this sale belongs only the two sons of my grand father with equal share.
So how should they file tax on capital gains? We got confused that 9 persons signed but only two persons gained benefit and how to show and declare for Tax. Please help
Dear Sir/Madam,
My wifes’s late Father’s property in Coimbatore was sold by the 5 legal heirs (Mohter, 2 Brothers and 1 Sister & my wife) at INR 75,50,000/- and my wife got a share of INR 14,00,000/- as Demand Draft from the buyer as agreed between the Buyer and all the Legal Heirs.
The DD has been deposited in my wife’s bank account. The building was from 1990’s and we are not sure about the original cost.
Please advise what would be the Capital gains Tax and how to avoid paying the same by investing the whole or part amount in Government approved schemes such as Rural Electrification etc. as we do not intend to buy any property for now.
How many years we have to invest and what is the returns if any on such investments.
Request advise.
Thanks ®ards,
TG Narayanan
Sir kindly clarify on :
Myself and my wife are the equal owners of flat purchased in 2008 . My wife has another House (land and building ) which she bought in 1988 in her individual capacity and now decided to sell . my query is:
1. Whether my wife has to settle/ gift her 50% ownership on the flat in my name before selling the house to avail exemption from capital gain tax liability.
2. By retaining her 50% ownership in the flat Whether she can buy another flat/ or can invest in capital gain bond to avail exemption
3. Whether a person can have two houses while disposing one and can buy another HOUSE to get benefit.
Thanks
sir kindly clarify to:
myself and wife have equal share in a flat purchased in 2009. my wife has another house (land and building) purchased in 1980 in her individual capacity which she wanted to dispose now . my query is :
1.whether she can use the sale entire consideration in buying another house /flat or investing in capital gain bond to avail exemption , while she has 50% share in another flat.
2.alternatively is it necessary that she has to gift/settle 50% of her share owned in the flat in my name before selling the house to avail exemption. thansk
I have a Capital gain of 2000000 by selling a land in 2011
I have purchased a land for 2000000 (invested complete capital gain in another land the same year) in 2011.
I have constructed a house in 2013 (invested my savings as capital gain amout is completely invested in the land).
Sold the land and house in 2015.
How will this be considered for Taxation
In new ITR forms, which should one fill if there is salary, income from interest and MF investments? I don’t see provision for ltcg, stcg entries in ITR-1.
sir when consideration received from sale of agriculture land and utilized for purchase of another agriculture land in the name of legal representative. Which dedution will be apply and how to treat this situation?
For claiming deduction under capital gain . In case of cost of improvement is it essential to produce valid document? .Is it possible to claim without valid proof .If so then how much one can claim ?
I have a following query:
In 1998, a lady acquired flat from developer against the tenancy rights, cost of which was zero. Her son inherited the said flat in 2008 on her death. He subsequently sold the same in 2014.
The cost of flat, not only to the assessee who sold the flat but to the original owner is also Nil.
What will be cost to the son? Is it right to do the valuation of the flat in 1998, the year when the lady acquired the flat against her tenancy rights and then index the cost arrived at on such valuation? Please note that cost of tenancy rights to the lady was nil.
Dear Sirs,
Kindly let me know whether there is capital gains tax on a sale of site which was purchased during 1990 and 1982.
Some consultants say, I have to pay tax. some opined that there is no tax liability.
I am a salaried person with 10% slab.
Kindly advise.
I have power of attorney of one house and i sold it. My question is in which hands capital gain is to be taxed, either in my hand or the person who is real owner of property.
a property purchase in 1973 through grand father under corporation area ,this property sold before 31.3.2015 but some other reason deal cancelled after take advance money about 70 lacs.in that period we purchased a one living house about 25 lacs from that money , after 31.3.2015 dated on 15.5.2015 above said property resold and get balance money.now what i do , how much tax will be deposit as advance tax or assessment tax.
Note:- The value of sale divided in two part because we two brothers than all will be divided in two part.
pl give right advice & calculation which that we submitted the correct return.
I have sold Equity shares of 9 companies on 27-02-2015 through ” Kotak Securities ” on line with the help of Kotak Securities Staff, which had been in “D’mat A/c Form”. since March 2007 with NSDL Approved Depository, viz PMC Bank, Mumbai.
” Kotak Securities ” credited ₹ 67611/- into my Saving Bank A/c on 03/03/2015 as .”NET SALE”
proceeds of my 9 Equity Scripts.
The shares of the companies were purchased during the year 1988 to 1996. The records/documentary evidence is Not available with me. I am 82 years of age. But, by taking the present ” Face Value” of the 9 Scripts, I seem to hEave made a Long Term Capital Gains of about ₹25000/- What is my Long Term Capital Gains Liability. Response is requested so that I do the needful before submitting my I.T. Return for AY 2015-16
I have shares of valuation of 10 lacs. I wish to hold these stocks for another 5 years. Is it compulsory to declare these stocks in returns though no ltcg or stcg faced during the financial year? Please reply.
what amount need to be transferred to profit and loss acount in case of sale of asset???? Explain briefly
In one word informative. Only deficiency lies in reply. All problems asked by different persons should be replied by you in the website. Please display the reply of public response/problems asked for.
can I invest capital gain in two separate residential houses..
Just seeking clarity if Short Term Loss can be adjusted during the year
I) against Short Term Gain
ii) against Long Term Gain.
I sold residential land in Bangalore North for Rs.1,15,00,000 [ One crore and FIFTEEN lAKHS] IN January 2015. This land was bought for Rs.44,00,000/- [Forty Four Lakhs] in December 2011. I want to reinvest this entire money in buying a flat/apartment. How do I get exemption from Capital Gains tax and how much time do I have to make this reinvestment ?Kindly Advise.
Thanks, Krishnaraj.
My wife purchased two houses of configuration of 1 BHK in 2005 for a certain sum, each adjacent and having a common kitchen and made it into one unit in the same year.At the time of sale, since it was difficult to get customers, it was once again sub-divided to two units by a brick wall. In 2014 she sold one of the house for a certain sum….immediately after the sale was done she invested the proceeds in a 2 BHK & the other one was sold in 2015. The purchase consideration for the 2 BHK now booked is double the sum of the sale proceeds of both units. Will the entire LTCG be granted and exempted as the entire proceeds will be invested in the new house?
Pl. advice my query.I sold a plot on 9-4-15The buyer gave me a cheque dated 31-3-2015as his loan was sanctioned on 31-3-2015.Am I to file this transaction in 2015-16. OR next year 2016-17……….Further ,the benefit of indexation is given in the case where cost of land was paid by me in instalments from year 2007 to 2013. Thanking you
I had purchased aflat residential for my own use for 15lacs and sold it now for 48 lacs and will buy a new flat for 40 lacs is there any tax liability
I had purchased the 15 lacs flat in 2019
Thanks
MU brother purchased a plot in siela quai ( dehradun ) VILLAGE PODOWALA OUTSIDE MUNICIPAL LIMITS IN 2010. NOW WE HAVE SOLD THE PLOT IN 2015. MY QUESTION IS WHETHER CAPLTAI GAIN WILL BE APPLICABLE OR NOT. DO I HAVE TO PAY ANY TAX ON THIS TRANSATION
Hi,
Should we invest the amount in capital gains bonds in the same financial year for us to claim tax benefits. I sold some MNC RSU in Feb’15 and want to invest it in April’15.
In your last example, Mr. Raja sold his bungalow for Rs. 80,00,000. The value adopted by the Stamp Valuation Authority of the bungalow for the purpose of payment of stamp duty is Rs. 84,00,000. In this situation, while computing taxable capital gain arising on transfer of bungalow, Rs. 84,00,000 will be taken as full value of consideration (i.e., sale value of the bungalow). Thus, actual selling price of Rs. 80,00,000 (being less than stamp duty value) will not be taken into account while computing taxable capital gain, if the person who bought the bungalow for Rs. 80,00,000 sell it out for the same rate after 2 years. What Tax Liability will he be liable to pay in case he has not paid any tax till the present day?
I have purchased house 6 years back for rs. 5500000/- now i am selling it for 12000000/- and making capital gain of Rs. 6500000/-.
i am purchasing another house for which the cost is 7500000/- I am investing only capital gain and not my principal amount will there be any capital gain on balance amount. please clarity
thanks
Informative article.
Please let me know the time when the CG tax need to be deposited after sale of house and realization of proceeds.
To further clarify, when I sell house in Jan and get the proceeds in the same month, when should I pay the CG tax.
Thanks in advance.
Very good articales for us to know and get aware. I like to know weather house property can be sold and land for agriculture can be punched . How the capital from hose gained on long can they exempted from capital gains
hi,
I have one house on my name at Lajpat Nagar, new delhi ; one commercial property and one residential flat in Gurgaon, Haryana . Both are residential houses.
We want to sell our residential Gurgaon house at Rs. 1 crore . Our purchase value of Gurgaon flat is Rs. 8 .2 lacs for which we got possession in the year 2000.
After selling our Gurgaon house, We will be investing Rs. 2 crore to purchase a new house in Noida, U.P. within next 1 year .
Do we need to pay long term capital gain tax on Rs. 1 crore that we will get by selling our Gurgaon house.
Or will that be exempted since, we will be re-investing in another residential house.
Also, are capital gain taxes applicable even if we own more than one house.
Under what section will we get long term capital gain tax benefit ?
do we need to open capital tax gain account as we will be investing in next 18 months. However, we have return files in march 2015 but our investment horizon will go upto March 2016.
Pls help urgently.
Thank you!
Rakesh
incase of reverse mortgage scheme if any person aquire any capital asset which was put as mortgage then all cost including interest paid to acquire such assets is consider as cost of acquisition to acquirer not in other case bcz in case of house property you has already claim the interest cost u/s 24b under income from house property so you can not claim interest twice so never allow
incase of reverse mortgage scheme if any person aquire any capital asset which was put as mortgage then all cost including interest paid to acquire such assets is consider as cost of acquisition to acquirer not in other case bcz in case of house property you has already claim the interest cost u/s 24b under income from house property so you can not claim interest twice
Very good article and nicely presented for anybody to understand. What is missing is:
1. The Interest part of the EMIs paid can be added to the cost before calculating the capital gain wrt selling price.
2. Cost of aquisition can also be added to the cost.