Comments on: How to Save Long Term Capital Gains Tax (LTCG)

By: Pankaj Batra

Pankaj Batra — Tue, 14 Jul 2020 11:30:22 +0000

@Kirit:
Purchase Year = 1996-97, Purchase Cost = 10,50,000
Fair market value on 1st April 2001: V
Cost Inflation Index (CII) for 2001-02 = 100
Sale Year = 2019-20, Selling price = 10000000, CII for sale year = 289
Indexed Purchase price = V x (289/100) = 2.89V
Long term capital gain = 10000000 – 2.89V

You need to get fair market value from a govt approved valuer.

By: KIRIT KANSARA

KIRIT KANSARA — Wed, 01 Jul 2020 12:02:45 +0000

My friend was gifted a plot of land by her sister in 2006. The plot was purchased in 1996. its value was 10,50,000. Now my friend sold that plot it in October, 2019 for Rs. 1crore. How the capital gain is to be calculated ?

By: Dr. Goswamy

Dr. Goswamy — Mon, 29 Jan 2018 08:51:07 +0000

In reply to Pankaj Batra.

Thanks, Pankajji for you timely reply.
Dr. Goswamy

By: Pankaj Batra

Pankaj Batra — Mon, 29 Jan 2018 08:29:19 +0000

In reply to Dr. Goswamy.

@Dr. Goswamy
As per section 54/54F, if gains/sale consideration are used in acquiring/constructing a new residential house property, then tax benefit can be taken.
First, part of land should be sold to builder and sale amount should be transferred and shown in transfer deed.
Now, amount towards construction cost should be transferred to builder and receipts should be taken.

By: Dr. Goswamy

Dr. Goswamy — Sat, 27 Jan 2018 04:36:51 +0000

Dear Mr. Pankaj Batraji,
Your article and replies are exhaustive and highly informative but I need to know my query as it is not covered above threads. I have a property in Delhi measuring about 250sq yd. I am intending to sale a part of it and build a house on the rest of the area (by demolishing the old structure fully).
The plot was bought in 1971 & the house was built in 1985 (no proofs/receipts of expenses on construction is available with me now). My queries are:

1. How will the LTCG be affected and will I get any benefits for this construction?

2. What proof does the IT dept need for the new construction part(as the same builder will do both i.e. buy, register his part and construct new for the same amount, no money being given or taken)?

I hope you will resolve my issue and advise as early as possible since your all advice are quite exhaustive and prompt in guiding in resolving LTCG issue. If possible kindly email the response or inform when the reply is put on your blog. I am a senior citizen, if that is relevant. Thanks.
With best regards,
Dr. Goswamy

By: Pankaj Batra

Pankaj Batra — Wed, 24 Jan 2018 11:26:26 +0000

In reply to AMAR BAID.

@Amar
If plot was sold in 2014, you should have constructed a residential house property on the new plot within 3 years of earlier plot sale, in order to avail tax benefit.

By: Pankaj Batra

Pankaj Batra — Wed, 24 Jan 2018 11:21:53 +0000

In reply to AMAR BAID.

@Amar
In case you construct a residential house property on the new plot, you can avail tax benefits under section 54F.
However this would only be applicable if you only have maximum one residential house property in your name before this property.

By: AMAR BAID

AMAR BAID — Wed, 24 Jan 2018 06:45:54 +0000

i purchased a plot in 2005 for rs 1 lac sold it for rs 8 lac in 2014 and purchased another plot for rs 9 lac . how do i save L .T C. G. TAX if i have construction cost 10 lacs.

By: AMAR BAID

AMAR BAID — Wed, 24 Jan 2018 06:32:02 +0000

I sold my residential plot during April 2017 for Rs.33 Lakh. I’m planning to buy another plot for Rs.55 Lakh by using Rs.25 Lakh out of Rs.33 Lakh.Remaining 30 Lakh (55-25), I’m planning to take loan. Please let me know whether I have to pay capital gains tax in this scenario.

By: Naveen

Naveen — Thu, 10 Nov 2016 11:23:03 +0000

Hi Pankaj,

I have sold my residential house and wanted to invest in a residential plot, once i buy the plot i will go for construction.. Am i eligible for capital gain tax savings? Please let me know..

Thanks,