What to keep in mind when you are selling a property? How to calculate capital gain from property selling?

Q: What to keep in mind when you are selling a property? How to calculate capital gain from property selling?

Kaustav Paul, Kolkata

17th December 2015

Legal in Kolkata

property tax

legal

investment advice

kolkata market

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Replies (4)

I sold a residential plot in 2014 and I invested total amount arise from selling a plot in buying a residential. What can I do to save on the tax over capital gains this time?

Ravindra Singh,

21st December 2015

Comment

As per my understanding, it appears that you will not be able to save income-tax. Please go through the provision of section 54 and 54F of Income tax act 1961.Also take some legal expert guide to have clear information.

Kunal,

21st December 2015

Hi All : I come across good article published in Commonfloor, Check it out here: https://www.commonfloor.com/guide/simplification-of-property-tax-issues-44228.html

V. Victor,

21st December 2015

I would like to clear my dough, Recently I have purchased a new apartment while selling my old property, I like to know if my purchase of the new property costing is more than that of what I receive from selling my old 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.

Kaushik Bardia,

21st December 2015

Comment

As per section 54, Any long-term capital gain arising on transfer of residential house property shall be exempt to the extent such capital gains invested in the purchase of another residential property within 1 year before or 2 years after the due date of the transfer of the property sold.

Kunal,

21st December 2015

Hey, I think construction of the 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 transferred within a period of 3 yrs. from the date of acquisition.

Govinda,

21st December 2015

Thanks Kunal, But still I am unable to understand what you are trying to say. Please explain one more so that I could get a clear idea?

Kaushik Bardia,

21st December 2015

Yes dear, you can claim deduction on long-term capital gain from sale of residential house property by investing such gains in either

1. Purchase of one residential house property within 1 year before or 2 years after the date of sale or
2. Construction of one residential house property within 3 years from the date of sale.

Kunal,

21st December 2015

Hello Dear, I was bought a residential apartment in January 2015 for Rs. 84 lakhs and sold the house in august, 2015 for Rs.90 lakhs. Is this gain of 6 lakh arising as an amount of sale of the residential house will likely be charged to tax?

Anish Mazumder, Kolkata

17th December 2015

Comment

Yes, dear, you have to pay capital gain tax. In your case of the capital gain comes under short terms capital gain and you have to 30% tax. No tax exemption benefit should be covered in this case.

Alokesh Nandi, Kolkata

17th December 2015

Thanks Dear for sharing clear cut information, I am a little bit confuse in my calculation of the long-term capital gain. Can you help me out in calculating long-term capital gain in case of selling of property?

Anish Mazumder, Kolkata

17th December 2015

Hi Anish, I think you should google it out and definitely you get the calculator to solve your problem. Long term capital gain arising on account of transfer of long-term capital asset will be computed as follows:

Sales consideration of property minus Expenditure incurred wholly and exclusively in connection with the transfer of the capital asset (E.g., brokerage, commission, advertisement expenses, etc = Net selling cost of the property. You have to also deduct any cost of acquisition and improvement cost.

debabrata sarkar, Kolkata

17th December 2015

Hi Kaustav,
Selling property is one of the time consuming and one should keep the various thing in mind before proceeding. On the sale of any kind of property, you are responsible for paying both short-term or long-term capital gains tax. Tax exemptions are the significant raise for any sector and moreover for the real estate sector due to the fact of the huge amounts of money concerned.

debabrata sarkar, Kolkata

17th December 2015

Comment

Hi Sarkar, You tell that we have to take care of property tax exemption, but I would like to know what is short-terms and Long-term capital gains from property? How to calculate it?

chandramohan das, Kolkata

17th December 2015

@ Das,
Short-term capital gains are gain which is applicable if you sell your property within three years of property purchase. Lets us take a simple example to understand short terms capital gains, if you are selling the property for Rs. 15,00,000, the short-term capital gains will be 30 per cent on the amount or Rs. 4,50,000.

debabrata sarkar, Kolkata

17th December 2015

As far as long-term capital gains are concerned those gains which are applicable if you are selling the property after 3 years.The calculation is very simple, 20% of the selling price. So for example, if the sale price of your property is Rs. 15,00,000, the long-term capital gains will be 20 per cent on the amount or Rs. 3,00,000.

bipin chandra, Kolkata

17th December 2015

Thanks, dear, for the quick response.Is there is any provision for Tax exemptions on long-term capital gains?

chandramohan das, Kolkata

17th December 2015

Yes dear, In case to avails tax exemption on long-term capital gains, you'll have to additional invest in a property.

debabrata sarkar, Kolkata

17th December 2015