Property sale proceeds will be taxable in the same year

Q: Capital gains on sale of long-term capital assets are subject to a tax rate of 20% (excluding surcharge and education cess)

jitu jayswal,

8th January 2016

Property Tax

ancestral property

capital gains

capital gains on sale of long-term capital assets

long-term capital asset

ltcg

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Replies (3)

But there are certain restrictions as well, if the capital gains remain un-invested until the due date of filing tax returns in India (i.e. 31 July), you may put the amount of capital gains in a Capital Gains Account Scheme (CGAS) with a bank (not later than the due date of filing your India tax return), and you can then subsequently withdraw this amount for reinvestment purposes.

Jackie,

8th January 2016

Comment

But remember, in case the entire amount is not reinvested or not deposited in a CGAS, the remaining portion of the gain will be taxable.

bashir,

8th January 2016

Is there any time period set for filing tax returns? How can we pay?

Jackie,

8th January 2016

@Jackie,
Tax on LTCG can be either paid via advance tax in 3 instalments (30% by 15 September, 60% by 15 December and 100% by 15 March) or before filing of tax returns by self-assessment tax along with interest by 31 July.

bashir,

8th January 2016

HI all,
How do we calculate taxable capital gain?

Sekhar, Noida

8th January 2016

Comment

Hi Sekhar,
The method for calculating the taxable capital gain will be net sale proceeds less indexed cost of acquisition (i.e. adjusted as per cost of inflation index or CII) less cost of improvement.

bashir,

8th January 2016

Can capital gain be exempted?

Sekhar, Noida

8th January 2016

Yes, the capital gain can be claimed exempt to the extent it is reinvested in India in specified bonds or a residential house (to be either purchased within two years or constructed within three years of transfer of the land).

bashir,

8th January 2016

Yes, sale of property situated in India will be taxable in the year of sale. Any immovable property held for a period of more than 36 months is classified as a long-term capital asset.

bashir,

8th January 2016

Comment

You are absolutely right Bashir,
Capital gains on sale of long-term capital assets are subject to a tax rate of 20% (excluding surcharge and education cess). For an ancestral property, the holding period would be calculated from the date of acquisition by the original owner.

Jackie,

8th January 2016