Do you have income tax-related queries?
Please ask your questions HERE and rediffGURU Vipul Bhavsar, a chartered accountant -- with 16 years of experience -- from The Institute of Cost Accountants of India, will answer them.
Anonymous: My father has sold property at 60 lakh and want to divide the amount between us (we are 2 brothers) to purchase individual properties. But if they gift us then long term capital gain tax of 7.5 lakh is applicable on same.
Please advise if he can take 2 properties on his name jointly with us. And if we can apply loan for extra amount that will occur the cost of buying those two properties. Here, I meant 2 separate loans (one on my name and 1 on my brother name).
We want the resolution to avoid capital gain tax and separate properties buying for me and my brother.
Yes he can purchase 2 properties and claim exemption under Sec 54, (this option is available only once in lifetime).
However, it is suggested to consult CA in order to make calculations and conscious decision with complete details before taking action as there are various factors to be considered before you set out to do it.
SRIDHARAN: Both Husband and Wife are having Long Term Capital Gains from sale of listed shares and redemption of units of equity mutual funds, but at different level.
Can both jointly purchase one residential property as per the provisions of Section 54F of Income Tax Act to claim tax exemption? If so, on what terms?
Yes you can purchase one residential property within 2 years or construct within 3 years provided you do not own more than one property already.
Exemption shall be:
Exemption = Long term capital gain * Amount re-invested/Net consideration
Anonymous: My taxable income is over Rs 50 lakh. Is my return more likely to invite scrutiny by the income tax department? I am a senior citizen.
No. There is no thumb rule for this.
Prasad: I inherited a land property in 1973 through a will executed by my grandma and the said property was only transferred to my name in 2001 after the death of my father. I recently sold that property for 70 lakhs.
I am a senior citizen without any source of income of my own and I would like to know what is the tax implications and how should l utilise these funds to reduce any tax burden also do I need to file any IT returns? I lodged all the money in the bank.
You shall need to calculate the Fair Market Value of the property as on 1 Apr, 2001. This value shall be your Cost of Acquisition (COA). The difference between the Document Price at which you sold the property and COA shall be Long Term Capital Gain.
If the sale transaction is on or after 23rd July, 2024, Long Term Capital Gain shall be taxed either at a rate of 12.5% without indexation benefits or 20% with indexation benefits.
Indeed, exemptions are allowed to you to save on Tax on LTCG, if you invest as follows:
Section 54: If old asset sold was residential house
New residential house is purchased within 1 yr before or 2 years after the date of sale or constructed within 3 years from date of sale (This house must not be sold within 3 years from date of purchase; if sold entire tax saved shall be repayable.
Investment amount shall be Long-Term Capital Gain OR Cost of a new asset, whichever lesser.
Section 54EC
- Purchase of NHAI bonds or RECL bonds, redeemable after 5 years. Maximum sum allowed is Rs 50 lakhs
- Investment to be done within 6 months from date of sale
Section 54F: If old asset was NOT Residential house
- New residential house is purchased within 1 yr before or 2 years after the date of sale or constructed within 3 years from date of sale (This house must not be sold within 3 years from date of purchase, if sold entire tax saved shall be repayable).
- Exemption shall be calculated as Cost of new asset * Capital Gain / Net consideration (maximum up to capital gain).
Kindly consult CA for detailed calculation after verification of documents
Anonymous: Is there any tax implication on total return from SIP for a NRI. Except tax saving MF with max deduction of 150000 is there any tax that I have to pay after 5 years of my SIP return? Please advise thank you
Based on Long Term and Short Term capital gain, you can claim exemption and balance shall be liable to tax as per applicable rates.
- You can ask rediffGURU Vipul Bhavsar your questions HERE.
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