Tax on sale of flat

Hi,

You will need to get the stamp duty value of your property as on 1.4.2001, then only we can compute capital gain.

Further, we can only compute tentative capital gain now because government has not yet declared cii index for FY 2018-19.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Hi

For this transaction, the stamp duty value of the flat as on 1.4.01 is to be known first. This value shall be then indexed.

Deducting the indexed cost of acquisition from the sale proceeds would give the capital gain amount.

LTCG tax would be 20% on gain amount.

You may claim tax exemption by reinvesting the capital gain amount in another house property or notified bonds.

Can you give me approx SDV value of property as on 1.4.2001? As in 5 lacs, 8 lacs, 10 lacs etc.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

The capital gains could be around 7.5 lacs. Thus, a tax of around 1.5 lacs.

#This is only an assumption. Correct figures would only be known after valuation of flat as on 1.4.01 and notification of CII for FY 2018-19.

Hi

Since the base index Year has been changed. Hence, you would be required to get the valuation of the property done for the year 2001-02 and then such value shall be indexed to the year 2018.

The same will be then compared with the sale value for the computation of capital gains. There could be capital loss also post having the valuation done on which there will be no tax liability.

Thanks

Damini

Hi,

Since the base year for indexation has changed,

Would request you to get the stamp duty value as on 01.04.2001for your flat and then we can calculate the approximate capital gains on tge sale of the flat.

Regards,

Nikhil

Hi ,

Taking CII value of FY 2017-18 , Cost of Acquisition is Rs 954720. Thus Capital Gain equivalent to Rs 15.45 Lakhs

you can also charge the value of Cost of improvement, Stamp duty paid, brokerage charges and selling expense while arriving at capital gain .

For the purpose of calculating exact tax on sale of property in FY 2018-19 there are two problems:

- Cost Inflation Index for FY 2018-19 is not yet available;

- Market value of the property on 01/04/2001 is required.

Any other calculation might give you an amount which is significantly different from your actual tax liability.

Hence, find market value of the property as on 01/04/2001 and proceed as follows:

Computation of Capital Gains:

Sale value = Rs.25,00,000

Indexed Cost = (Mkt. value on 01/04/2001) x (CII for FY 2018-19) / 100

Capital Gain = Sale value (-) Indexed Cost

Tax = 20% of Capital Gain

Cess = 4% of Tax

Total Tax = Tax + Cess

Suppose CII for 2018-19 would be 286

Full value of consideration Rs. 25,00,000

Indexed COA Rs. 10,03,860

Capital Gain would be Rs.14,96,140/- and tax would be Rs. 3,11,200

Note: Considering COA as Rs.3,51,000. You should obtain FMV as on 01.04.2001 which will substantially reduce the capital gain amount.

As you sold flat in the F.Y. 2018-19 (i.e. A.Y. 2019-20) and in the starting month i.e. April 2018, therefore you have ample time to deposit in capital gain account scheme. You can deposit the amount before 31.07.2019 subject to your reinvestment plan.

If you want to reinvest in another house property you should purchase another property within 1 year from the date of sale or construct within 3 years from the date of sale.

It is better to deposit in the CGAS otherwise you need to pay Advance tax in three installments.

Thanks

Hello,

Approx tax can be calculated only after you provide the property valuation as on 01/04/1981.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, FCA, LLB, CERT. FAFP