Property buying and selling- Capital Tax Exemption

Q: I want to buy a property at Kolkata ( a residential flat) jointly with my son almost with 50 % contribution from each of us. My initial payment will be by breaking my bank fixed deposits and the balance payment from the sale proceeds of my property (flat) for which seller-buyer agreement has been done.
My question is if my payment for the new property is more that what I receive from selling my present property (more than seven years old), then whether I can avail the Capital Gain Tax exemption u/s 54, even if the new property will be purchased jointly by me and my son.
If I buy a property first at Kolkata investing from my own savings (Bank Fixed Deposits) and later on within a year I sell my Gurgaon flat and invest the sale proceeds investing in Bank Fixed Deposits, am I eligible for capital gain exemption, obviously if the buying price is more than the selling price.

ARUN KUMAR GHOSH,

12th February 2015

Property Tax in Gurgaon

long term capital gains

income tax act

capital tax exemption

tax exemption u/s 54

short term capital gain

sale of assets

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Replies (5)

I am selling my property in Gurgaon over which I am getting a premium of Rs. 10 lakhs. Is it liable for income tax and how much income tax, do I need to pay for receiving the premium amount of Rs 10 lakhs. Please advise

V. Victor,

15th December 2015

Comment

Yes, you will have to show this in your current year income. If you do not invest the proceed in another property, the premium will be considered as short-term capital gains and income tax slab equivalent to your income will be applicable.

david.m,

15th December 2015

Hi Guys,
This online tax payment process is easier to understand as well as it is user friendly, with both online and offline help. Which only takes about 2-3 minutes. This process also monitors and updates the property tax arrears as well as penalties. This online process also helps in dynamic calculation of interest amount & late fees.

V. Victor,

13th October 2015

Comment

You have to register yourself and create an ID by following the MCG page link-http://www.mcg.gov. This link will also help figure out the exact location in Gurgaon. To find out the exact location, you have to fill in the details for the pin-code, Ward, Police Station, Colony, Zone as well as names of applicable official details.

Sumit Bhusan, Gurgaon

13th October 2015

Comment

Hi Guys,
Here is how to pay property tax on line.

You can click this link http://www.mcg.gov.in/MCGPortal/User/HouseTax2012.aspx to view the Gurgaon Online Tax Payment Page.

This online property tax payment initiative was launched in order to allot unique property identification code for each & every properties in Gurgaon.

Ansal Patwari, Gurgaon

13th October 2015

Comment

As per my knowledge, benefits of this online process is payment options. Different payment options are coordinated such as credit card, cheque, DD, ITZ cash & cash at authorized CSB centers and other bank counters. This online property tax discounts will be calculated automatically depending on the day of filing of PTR or challan generation.

So no need to stand in intolerable queues to pay your property tax, because now you can make the payment with just one click of a mouse while sitting in your home. You have to spend only 2-3mins to pay your tax.

david.m,

13th October 2015

Hi,
When you are selling any long term Capital Assets, the gains are usually very large and are taxed @20%. Such gain could either be Short Term Capital Gains or Long Term Capital Gains. As your property is 5 yrs. old then it will come under Long Term Capital Gains.

Short Term Capital Gains- if the asset is held for less than 36 months
Long Term Capital Gains- if the asset is held for more than 36 months.

Promit Dutta, Kolkata

11th March 2015

Comment

Under section 54- Any long term capita gain, arising to an individual or HUF, from the sale of Residential property (whether self occupied or on rent) shall be exempt to the extent such capital gains invested in the
1) Purchase of another residential property within 1 year before or 2 years after the due date of the transfer of the property sold and/or
2) construction of residential property within a period of 3 years from the date of acquisition
It is also notable that the new residential house property purchased or constructed is not transfered within a period of 3 yrs. from the date of acquisition

Promit Dutta, Kolkata

11th March 2015

if the new property is sold within a period of 3 yrs. within the date of its acquisition , then, for the purpose of computing the capital gains on this transfer, the cost of acquisition of this house property shall be reduced by the amount of capital gain exempt under sec-54 earlier.

Measure of deduction under section-54- 1) if the entire amount is equal to or less than the cost of new house, then the entire capital gain shall be exempt. 2) If the amount of Capital Gain is greater than the cost of new house shall be allowed as an exemption.

Promit Dutta, Kolkata

11th March 2015

Budget 2014 has introduced an amendment to section-54 and from and from financial year2014-15 i.e. assessment year 2015-16, exemption under section 54 is available if the amount is re-invested in 1residential House situated in India.

The exemption under section-54 would also be available if the amount is invested in an under construction residential house. In spite of, service tax is levied on purchase of under construction property.

Promit Dutta, Kolkata

11th March 2015